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The European Union looks set to agree on an oil embargo against Russia that would exempt pipeline exports, Reuters has reported, citing a draft document to be discussed later today during the EU summit.
"The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline," the draft said.
Over the weekend, the member states of the European Union once again failed to reach a mutually acceptable agreement on the proposal for a full oil embargo on Russia but are not giving up and will try again today and tomorrow.
Reuters quoted one unnamed diplomat as saying that there was "still too much detail to sort out," earlier today.
The biggest holdout in the sanction discussions continues to be Hungary, which has insisted it was too dependent on Russian oil imports to support sanctions against them.
The EU has made an effort to accommodate Hungary's concerns and those of other Central European countries that also receive the bulk of their oil from Russia, recently agreeing to exempt pipeline imports of oil from Russia from the sixth sanction package.
In other words, the only Russian oil to be embargoed by the EU per the latest proposal is oil coming by tankers.
Hungary, however, was still not happy with the arrangements this weekend when the EU met to discuss sanctions, insisting that it receive EU funding in order to increase pipeline import capacity from Croatia and reconfigure its refineries so they can process Brent crude rather than Urals.
EU diplomats had hoped that the EU summit, to take place today and tomorrow, could reach a unanimous decision on a ban on Russian oil, to be phased out over six months and with exemptions for central European countries, including Hungary, Slovakia, and the Czech Republic.
However, last week Hungary's Foreign Minister indicated another failure to agree on joint action may be on the way, saying that if the Russian oil embargo was on the table at the summit, it "would run the serious danger of dismantling European unity."
Meanwhile, EC president Ursula von der Leyen somewhat surprisingly said last week it is actually better if the EU continued to import Russian oil, as this would prevent President Vladimir Putin from selling it on other markets at higher prices.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.