Geoffrey Smith

Investing.com — On Monday, the European Union’s plan to place an oil embargo against Russia looked like it was heading for collapse. This came just before a summit of leaders from member countries later that day.

The EU had intended to have plans in place to end Russian and refined product purchases by the close of this year. To become effective, however, the EU needs unanimous support from all its member states. The new sanctions package, which is the sixth since Russia’s invasion of Ukraine in February 2017, has been rejected by Hungary, Czechia, Slovakia, and to a lesser degree Czechia. All three countries are landlocked and have an historical dependency on oil from Soviet-era pipelines.

Robert Habeck, Germany’s Vice-Chancellor, warned that European unity was “starting to collapse and crumble again” after talks between diplomats failed with Hungarian resistance despite attempts to delay the embargo for three central European countries.

According to different reports, the agreement on oil was not reached and other aspects of the package were weakened. The draft package also dropped a proposal to ban Russian investments in European real property.

Josep Borrell (EU’s top diplomat) was still hopeful that a deal would be made Monday.

Borrell said that “I believe this afternoon we will be in a position to offer to members heads an agreement,” France Info radio station France Info reported.

European crude oil and natural gas imports from Russia generate $1 billion in revenues per day for Moscow and make them the largest single source of Russian hard currency. The war caused Russian defense spending to more than double to $300 million per day, according to Finance Ministry data.