EU moves step closer to deal on Russian oil embargo

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EU leaders are set to discuss a plan to water down proposed sanctions on Russian oil in an attempt to bring Hungary on board, according to diplomats and draft summit conclusions seen by POLITICO.

Under wording put forward by EU ambassadors, deliveries of Russian oil by pipeline would continue temporarily while sanctions are applied to supplies delivered by ship.

The plan, first reported by POLITICO last week, would represent a weakening of the European Commission’s original proposal for a “complete ban” on Russian oil imports.

The wording was settled during talks among envoys on Monday morning and will now be sent to EU heads of state and government to discuss at their meeting in Brussels later today. The leaders — who include Hungary’s Viktor Orbán — may not agree to it and even if they do, much more work will be needed on the details before any sanctions can come into force.

Viktor Orbán may not agree to the watered down proposed sanctions against Russia | Attila Kisbenedek/AFP via Getty Images

The compromise on pipelines would help landlocked countries such as Hungary, which has blocked an agreement on banning imports of Russian crude and refined fuels on the grounds that such action would deliver a severe blow to its economy.

The draft summit conclusions state the “European Council agrees that the sixth package of sanctions against Russia will over crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline.”

The package has to ensure fair competition and a level playing field in the EU single market and solidarity among EU countries in case of sudden interruptions of supply, the text reads.

The draft conclusions don’t mention a specific timeline for the temporary exception for crude oil delivered by pipeline, stating the exemption should end “as soon as possible.”

An EU diplomat said that a lot of progress on the package was made Monday morning, but that further technical work is needed. “The goal is to have a political deal today,” the diplomat said. Two senior EU diplomats said it was now up to leaders whether or not they adopt the language as hammered out by EU ambassadors.

If EU leaders agree on a political deal on the package, the Council of the EU will still have to formally agree on the sanctions. One diplomat expressed doubts about whether leaders would sign up to the language as it stands, while another said the wording was so broad it didn’t mean much as many of the arguments over details remain unresolved.

Russia supplies about a quarter of the EU’s crude oil, according to Eurostat figures. A sanctions carve-out for pipeline imports would result in an exemption for up to 30 percent of Russian oil sales to the bloc, according to data from market intelligence firm Argus Media.

David M. Herszenhorn and America Hernandez contributed reporting.