Hungary is still holding up the E.U.’s push to phase out Russian oil

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BRUSSELS — The European Union is not done talking about Russian oil. Nor is it done buying it.

In Monday morning talks, E.U. ambassadors once again failed to reach a deal to phase out imports of oil from Russia because of the ongoing opposition from Hungary, keeping the issue on the E.U.’s agenda — and Russian oil flowing to Europe — for at least another day.

The issue now threatens to overshadow a two-day European Council summit on the war in Ukraine that starts Monday afternoon in Brussels, where E.U. leaders will discuss a watered down plan that would ban seaborne deliveries but exempt pipeline oil.

A senior E.U. official, speaking on condition of anonymity to brief the press, said the European Council hopes to reach a political agreement on the revised proposal Monday. It is not yet clear if all 27 leaders will sign on.

Arriving at the summit, Hungarian Prime Minister Victor Orban said he had seen the revised proposal and there is still no agreement on it. He welcomed the decision to exempt pipeline oil — a Hungarian request to begin with — but said he also needs guarantees that his country’s supply of Russian oil will be protected if something happens to the pipeline that passes through Ukraine to Hungary.

European Commission President Ursula von der Leyen said Monday that there would be a deal — eventually. “My expectations are low that it will be solved in the next 48 hours,” she told reporters as she arrived at the summit in Brussels.

Ukraine suffers on battlefield while pleading for U.S. arms

As the summit got underway, E.U. leaders listened to a closed-door virtual address from Ukrainian President Volodymyr Zelensky. European Council President Charles Michel thanked Zelensky for his “sincere” remarks. “We will boost your liquidity and help you reconstruct Ukraine,” he tweeted. “We will continue to bolster your ability to defend your people and your country.”

While E.U. officials and leaders would like to keep the focus on E.U. support for Ukraine, they will not be able to escape the fact that Europe continues to buy large quantities of Russian oil, keeping money flowing to the Kremlin.

Since the Russia’s full-scale invasion of Ukraine, member states have been trying to find ways to wean off Russian fossil fuels while securing enough energy to keep the lights on across Europe. They agreed to phase out coal, but oil talks have been harder and have now been held up for weeks by Orban.

Orban compared an E.U. oil ban to dropping a “nuclear bomb” on his country’s economy and has insisted on more time and money to upgrade his landlocked country’s oil infrastructure. Though there has been willingness to grant concessions to Hungary and other countries that are deeply reliant on Russian pipeline oil, the Hungarian leader has been granted extensions but continues to press for more, according to E.U. officials and diplomats.

Some express concern that Orban — one of Russian President Vladimir Putin’s closest allies in Europe — appears to using the situation to hit back at E.U. officials for withholding Hungary’s economic recovery money and threatening to hold back billions in subsidies for democratic backsliding.

E.U. proposes cutting funds to Hungary for rule-of-law breaches

The latest proposal on the table calls for a ban on seaborne deliveries, but exempts pipeline deliveries for now, keeping oil flowing from Russia to several E.U. countries, including Hungary, according to a draft proposal obtained by The Washington Post. The draft does not set out a timeline for the exemption.

Exempting pipeline oil would soften the impact of the oil measures. An E.U. official, who spoke on the condition of anonymity in order to brief the press, said that phasing out all seaborne deliveries would hit about two-thirds of imports.

The exemption for pipeline oil allows continued supplies through the Druzhba network, which runs through Belarus to Poland and on to Germany, and through Ukraine to Slovakia, the Czech Republic and Hungary. Since Poland and Germany have already pledged to wean off Russian oil this year, the bloc could theoretically cut back further still.

However, there is no question the compromise — and the message it sends — are a boon to Russia, which has many in Brussels asking questions about what went wrong.

Many E.U. officials and diplomats have tried to downplay Hungary’s role, casting the challenges as technical, not political.

One senior E.U. diplomat, speaking on condition of anonymity to discuss sensitive issues, said that in an effort to move quickly E.U. officials and diplomats had failed to look closely enough at what an oil would mean to member states that get most or all their oil from Russia.

“Under the pressure of this war, we have taken some steps too soon and now we are facing the consequences,” the senior diplomat said.

Others see the issue as inherently political — and all about Orban. “Whenever something is conceded to Hungary, they ask for something more,” said another E.U. diplomat, speaking on condition of anonymity to discuss ongoing negotiations.

“Let’s see what happens with Orban tonight,” the diplomat continued. “It is him who calls the shots.”

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