The Druzhba pipeline is Hungary's main oil import channel and is also the main focus of Hungary's opposition to sanctions on Russian oil.
EU member states failed to reach an agreement on a package of sanctions against Russia ahead of a leaders' summit on Sunday, but negotiations will continue this week.
Hungary has refused to agree to a compromise despite proposals aimed at securing Russian oil supplies, according to people familiar with the matter. Representatives to the EU were due to meet again on Monday morning, but the failure to reach an agreement means sanctions are likely to be the top issue at the two-day meeting starting on Monday. An EU official said a deal was still possible in the coming days.
According to foreign media reports, The European Commission sent a revised Russian oil cargo embargo proposal to member states, proposing to ban the import of Russian oil by sea and requesting a postponement of import restrictions on the key Druzhba oil pipeline in order to satisfy Hungary's opposition. Advocacy to impose sanctions on Russian oil.
Industry publications pointed out that one month before the outbreak of the Russia-Ukraine conflict, approximately 750,000 barrels/day of Russian crude oil flowed to various refineries in Europe through the Druzhba oil pipeline. The Druzhba pipeline is Hungary's main crude oil import route.
According to the latest proposal, EU countries will have six months to phase out shipping Russian oil and eight months to phase out shipping Russian oil products .
Hungary has previously said it would support a package if the Druzhba pipeline was removed from sanctions. But two people familiar with the matter said Hungary is now demanding more concessions from the EU.
EU sanctions require the unanimous consent of all member states. People familiar with the matter said that several countries had previously opposed treating seaborne oil and pipeline oil differently because they were worried that such a division would be unfair and would disproportionately affect their supplies. Others are concerned that the proposed compromise could make the entire sanctions package too weak.
According to people familiar with the matter, under pressure from Cyprus , the latest version of the text eliminated a provision that prohibited Russians from buying real estate in EU countries. Haggling over the terms of the EU oil embargo has also led other member states to seek exemptions in their favor.
If the EU cannot win Hungary to join the sanctions plan, it will mean a major setback for its unified stance on Russia. It will also be very embarrassing for the European Commission, which announced the embargo plan a few weeks ago.
The latest proposal would give Hungary more time to find technological solutions to its energy needs. It will also address the concerns of other landlocked countries, including Slovakia and Czech Republic . According to the revised draft, Bulgaria will get a transition period until June 2024 or December 2024, Croatia can obtain an import exemption for pressure-reducing wax oil.
Informed sources said that a plan to ban the provision of insurance for Russian crude oil exports to third countries has extended the transition period from 3 months to 6 months after the implementation of the package.
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