EU discusses diluted oil embargo on Russia as Hungary holds out


Oil prices rose as traders closely watched whether the EU would agree to a ban on Russian oil imports.

Attila Kisbenedek | Afp | Getty Images

The European Union will continue to work on an agreement to embargo Russian oil on Monday after attempts to do so failed on Sunday.

The talks are largely held up by Hungary, a major consumer of Russian oil and whose leader Viktor Orban is friends with Russia’s Vladimir Putin.

Budapest this weekend expressed support for a European Commission proposal that would only sanction Russian oil brought into the EU by tankers, forcing landlocked energy importers Hungary, Slovakia and the Czech Republic to sell their Russian oil. continue to receive pipelines until alternative sources are found. However, the talks were held up by Hungary’s requests for EU funding.

A spokesman for the European Commission, the EU’s executive branch, declined to comment on the pending proposals.

The proposed sanctions on oil imports would be part of the EU’s sixth sanctions package against Russia since it invaded Ukraine in late February.

About 36% of the EU’s oil imports come from Russia. Energy prices, already high early this year, have skyrocketed since Putin launched the war against Ukraine.

Oil prices rose Monday as market participants closely watched that the world’s largest trading bloc would agree to impose a ban on Russian oil imports.

International benchmark Brent oil futures traded 0.8% higher at $120.41 a barrel in London, while US West Texas Intermediate futures traded 0.9% higher at $116.15.

“As Russia is a major producer and exporter of crude oil and refined products, a sales embargo would cause significant financial pain,” said Tamas Varga of oil brokerage PVM.

“On the other hand, in the absence of firm additional retaliatory measures, the EU is still funding Russia in the conflict. In the first three months of the war, it acquired $60 billion in energy, hardly a recipe for causing financial hardship for the intruder,” said Varga.

“That’s how much the EU admits to itself. What is being seriously discussed is whether sanctions are the best way to punish Russia or… [whether] imposing tariffs would be more effective,” he added.

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