Wednesday, July 6

The EU discusses a reduced embargo on Russian oil that continues to block Orbán

The 27 are still blocked. Diplomatic sources assure that the problem is more technical than political, but the truth is that, a month after the European Commission released its proposal for a sixth package of sanctions, including the embargo on Russian oil, the EU still has not approved it. This Sunday the ambassadors to the EU met again, on the eve of the leaders’ summit on Monday and Tuesday. And, for the moment, the matter remains stalled, which means not only that Russian oil is not sanctioned, but that sanctions are still up in the air for new people and entities that have had the whole month to hide their assets, such as the case of the patriarch of the Russian Orthodox Church and the alleged partner of the Russian president, Vladimir Putin, for example.

Sources from the Commission and the rotating French presidency of the EU, who have led the discussions over the last 48 hours with the Member States, have explained that “the proposal that is now on the table distinguishes between a total ban on maritime imports Russian, which would enter into force at the end of the year, and an exemption, for the time being, for oil from the Druzhba pipeline.

The Druzhba (friendship) pipeline is the longest in the world. Built by the USSR in 1964, it starts in the southeast of Russia, where it loads oil from Western Siberia, the Urals and the Caspian. From there, it reaches southern Belarus, where it branches off into a southern and a northern branch. The south runs through Ukraine, Slovakia, the Czech Republic and Hungary. The north crosses Belarus to Poland and Germany. The pipeline has a capacity of 1.2 million to 1.4 million barrels a day.

“If we target the oil that arrives from Russia by sea, we are talking about 2/3 of Russian exports, it is serious damage,” explain diplomatic sources, who insist: “The sanctions have to be approved unanimously.” And, in this case, Hungary presents problems, but also Croatia, Bulgaria, the Czech Republic and Slovakia. On the other hand, there are countries like the Baltics, which are already disconnecting from Russian oil.

“The European Council will be informed this Monday and an agreement is expected in the COREPER [reunión de embajadores ante la UE] next week [suelen mantener reuniones ordinarias los miércoles y los viernes]”.

In addition to the problems of “security of supply in the face of 100% dependence on Russian oil”, the sources explain about the problems presented by Hungary, others have appeared on the part of countries that argue the problems for the single market that it can mean that one part of Europe receives cheap Russian oil by pipeline while another has to buy much more expensive oil from oil tankers from other latitudes.

“We don’t see it clearly”, Dutch government sources explain: “There were too many issues in relation to the internal market not being altered. Italy, Romania, Bulgaria, Belgium, us… We think that if cheap oil comes from one side and you have that from the ship from another side and they enter the internal market, there will be problems because it will distort the internal market. We have to make sure that it will be done in a way that does not further damage the internal market”.

“We continue to work on the issue of sanctions”, explained the diplomatic sources after the last failed meeting: “Perhaps tomorrow at the new meeting of ambassadors before the summit there will be more clarity and the formula for sanctioning Russian oil can be found. There is a desire of the 27 to achieve it, it is a technical matter that must be closed due to the national specificities of countries that are more dependent than others: if you are dependent on an oil pipeline, you would only set a limit if there is an alternative, and the Hungarians they want collateral from alternative sources. These are things that should be solvable and I think that in the end the Hungarians will find themselves comfortable. If there is no agreement, we will not ask to withdraw the package, but it will mean that we need to assess it, that we have not found the formula and we need more time”.

However, the Hungarian Prime Minister, the ultra-nationalist Viktor Orbán, and the leader of the French extreme right, Marine Le Pen, agreed this Friday that the European Union’s sanctions against Russia for the invasion of Ukraine are “wrong and dangerous”. ”. Orbán’s spokesman added: “It is clear that Brussels bureaucrats and left-wing parties cannot be trusted to defend European citizens and families.” Orbán and Le Pen addressed issues related to the war in Ukraine and its consequences, as well as inflation and “Brussels’s erroneous and dangerous sanctions policies,” the MTI news agency added.

The European Council begins this Monday at 4:00 p.m., but the leaders are not expected to be able to close such a technical agreement, which needs lawyers even to translate the sanctions into legal texts, but they could give political guidelines on how to move forward to be able to close it Wednesday or later. “We have to wait and that Hungary receives guarantees.”

Dutch government sources acknowledge the complexity of the oil sanctions: “Perhaps we should have started earlier with the impact analysis. I didn’t even know the consequences of how the single market and competition affect oil. To see inside the matter you have to do a lot of work. We already knew that the first sanctions packages were going to be much easier than the later ones. We need time, there is understandable pressure, but there is no reason to criticize the work of the European Commission”.

If the 27 go four weeks without reaching an agreement to sanction Russian oil, the hypothetical gas sanctions will be more complicated. “Oil is the easy part compared to gas, and we already see how difficult it is. Gas will be even more difficult. When we talk about gas, it has to be long-term and seek resilience, investment in renewables, apply the REPowerEU plan of the European Commission to accelerate the disconnection from Russia and be more independent as soon as possible”.

During the summit on Monday and Tuesday, the leaders will also address issues such as food supplies from Ukraine, blocked by Russia; the confiscation of the property of the sanctioned persons; Russia’s accelerated energy disconnection path, the European Commission’s REPowerEU plan; and the financing needs of Ukraine, among other issues, such as the analysis of the electricity market carried out by the regulator, ACER.