EU Push to Ban Russian Oil Is Stalled by Hungarian Demands

May 8, 2022

(Bloomberg) Hungary continued to block a European Union proposal that would ban Russian oil imports, holding up the bloc’s entire package of sanctions meant to target President Vladimir Putin over his war in Ukraine, according to people familiar with the talks.A meeting of the EU’s 27 ambassadors ended on Sunday without an agreement, with talks expected to resume in the coming days, said the people, who asked not to be identified because the discussions were private. A ban on shipping Russian oil to third countries may also be delayed until Group of Seven countries commit to similar measures.

The EU’s proposal seeks to ban crude oil over the next six months and refined fuels by early January. The EU had offered Hungary and Slovakia until the end of 2024 to comply with the sanctions and the Czech Republic until June of the same year since they are heavily reliant on Russian crude.

The exemption failed to convince Hungary, which continued to block the plan on Sunday over the oil ban as well as how to fund the transition away from Russian energy, the people said.

“We have voted for all the sanctions packages so far, but this latest one would destroy the security of the Hungarian energy supply,” Hungarian Foreign Minister Peter Szijjarto said in a statement on Sunday. “As long as there is no solution to the problem caused by the Brussels’ proposal, we will not vote for this package.”

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The EU had been pushing to have the sanctions concluded by Russia’s May 9 Victory Day, which marks Russia’s victory over Nazi Germany in World War II.

Shipping, Insurance

Under an EU plan circulated to member states in the past week, European companies and individuals would be banned from providing vessels and services, such as insurance, needed to transport oil to third countries.

Greece and Cyprus want the vessels portion of that proposal delayed until after G-7 countries adopt similar measures, according to the people.

The EU is also proposing to:

Cut three more Russian banks off the international payments system SWIFT, including Russia’s largest lender Sberbank.
Restrict Russian entities and individuals from purchasing property in the EU.
Ban providing consulting services to Russian companies and trade in a number of chemicals.
Sanction Alina Kabaeva, a former Olympic gymnast who is “closely associated” with Putin, according to an EU document; and Patriarch Kirill, who heads the Russian Orthodox Church and has been a vocal supporter of the Russian president and the war in Ukraine.
Sanction dozens of military personnel, including those deemed responsible for reported war crimes in Bucha, as well as companies providing equipment, supplies and services to the Russian armed forces.