EU ban on Russian oil: Orban-VDL talks fail to produce a breakthrough

A face-to-face meeting between Ursula von der Leyen, president of the European Commission, and Viktor Orbán, prime minister of Hungary, failed to deliver the much-needed breakthrough to push the proposal for an EU-wide ban on Russian oil imports over the finish line.

The main point of contention remains the ambitious timeline envisioned by the Commission: a phase-out of all Russian crude in six months and all refined oil products by the end of the year.

Talks began last Wednesday and have now gone into a seventh day. 

For Hungary, a country that is physically connected to the Russian-operated Druzhba pipeline, making the switch to other providers in such a short period of time would wreak economic havoc.

“We cannot allow the Hungarian people to be made to pay the price of this war,” Hungary’s Foreign Affairs Minister Péter Szijjártó told local media after the two leaders met in Budapest.

“Hungary’s energy supply is currently on solid [ground]. However, the entry into force of the current sanctions package would destroy Hungary’s energy security: it would be impossible to obtain the crude oil needed to operate the Hungarian economy.”

Szijjártó said the talks yielded “some progress” and served to explain the country’s particular circumstances and economic concerns.

“This evening’s discussion with PM Viktor Orbán was helpful to clarify issues related to sanctions and energy security,” von der Leyen tweeted on Monday evening.

“We made progress, but further work is needed. I will convene a with regional players to strengthen regional cooperation on oil infrastructure.”

The video conference was initially scheduled to take place on Tuesday morning, with the participation of President von der Leyen, PM Orbán and President Emmanuel Macron of France, whose country currently holds the EU Council’s rotating presidency.

A Commission spokesperson said on Tuesday afternoon the call had been postponed and will take place once progress at “technical” level has been achieved.

Discussions are now focused on oil transportation infrastructure, oil refinery infrastructure and the transformation of the energy system, rather than on the differentiated timelines, the official explained. 

Reports last week suggested Hungary could be allowed to complete the phase-out by December 2024, but Orbán said his country, which is landlocked and therefore unable to import seaborne oil, needed between four to five years to revamp its energy system.

The prime minister then compared von der Leyen’s proposal to an economic “atomic bomb.”

Although Hungary has been the most vocal country in its criticism of the Commission’s proposal, it is not the only sceptical member state: Slovakia, the Czech Republic and Bulgaria are also demanding similar dispensations to accommodate national interests and prevent economic disruption.

Slovakia, which shares a connection to the Druzhba pipeline, is asking for a three-year exemption in order to update the technology of its sole refinery, Slovnaft, which today works exclusively with a heavy type of Russian crude, a Slovak spokesperson told Euronews. 

Repurposing the system to a lighter crude will require between four to six years and €250 million in investment, the government estimates.

For its part, the Czech Republic is negotiating an extension until June 2024, the date by which it expects to be connected to the Transalpine Pipeline. 

EU sanctions require the unanimous approval of all 27 member states. This means the group of four could hold up the collective decision for as long as they think necessary to secure their carve-outs.

“I think we can have an agreement within a week, we are working hard on it. It’s probably a matter of days,” French European Affairs Minister Clement Beaune said on Tuesday.

“We have to move quickly, and I say this with confidence: there will be a sixth package of European sanctions, they will be very powerful and we will gradually get out of Russian oil.”

The proposed EU-wide ban on Russian oil is considered the most radical and consequential step taken by the bloc in response to the Ukraine war.

Since the onset of the invasion on 24 February, the 27 member states have spent about €24 billion on Russian oil, according to a tracking tool set up by the Centre for Research on Energy and Clean Air (CREA), an independent research organisation.

This article has been updated to include new developments and reactions.