31.05.202209:55 Forex Analysis & Reviews: EU summit to agree sanctions should include Russian oil embargo with pipeline exemption

European Union leaders are due to agree at a summit that the sanctions package under preparation should include an embargo on Russian oil imports, but exempt pipeline crude deliveries, Reuters reported, citing a draft document.Over the weekend, EU member states once again failed to reach a mutually acceptable agreement on a proposal for a full oil embargo on Russia. Therefore, they continue to discuss the issue now.Reuters quoted a senior EU diplomat as saying there is "still too much detail to sort out".In the sanctions debate, Hungary is the most opposed, insisting it is heavily reliant on Russian oil imports to support sanctions against it.The EU has taken into account the fears of Hungary and other Central European countries, which also get most of their oil from Russia, and recently agreed to exclude pipeline oil imports from Russia from the sixth sanctions package.Put another way, the ban applies only to Russian oil brought into the EU by tankers.Nevertheless, Hungary was dissatisfied with such arrangements. The country insisted on obtaining EU funding to increase pipeline import capacity from Croatia and to reconfigure its refineries to process Brent crude rather than Urals.

Last week, Hungary's foreign minister pointed out that a deal on joint action could be unsuccessful. He said that if an embargo on Russian oil was discussed at the summit, it would destroy European unity.European Commission President Ursula von der Leyen last week unexpectedly said it would actually be 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.