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EU to discuss watered-down oil embargo on Russia as Hungary holds firm


As traders watched closely the possibility that the EU would impose an oil ban on Russia, the prices of oil rose.

Attila Kisbenedek | Afp | Getty Images

On Monday, the European Union will keep working towards an agreement to block Russian oil imports after Sunday’s failed attempts.

Talks are being held up by Hungary. Hungary is a significant user of Russian oil, and Viktor Orban, their leader, is friendly with. Russia’s Vladimir Putin.

Budapest over the weekend signaled support for a European Commission proposal that would apply sanctions only on Russian oil brought into the EU by tankers, which would allow landlocked energy importers Hungary, Slovakia and the Czech Republic to continue to receive their Russian oil via pipeline until alternative sources can be found. However, Hungary demanded EU funding to halt talks.

Un spokesperson from the European Commission, which is the executive arm of EU, refused to comment about the current proposals.

The proposed sanctions on oil imports would be part of the EU’s sixth sanctions package on Russia since it invaded Ukraine in late February.

Russia accounts for 36% of EU oil imports. Since Putin’s war against Ukraine, energy prices have risen to an all-time high.

On Monday, oil prices rose as investors closely watched the possibility that the largest trading group in the world would agree to ban Russian imports.

International benchmark BrentOil futures prices were 0.8% higher in London at $120.41/barrel, while the U.S. was 0.8% lower. West Texas IntermediateFutures prices were 0.9% higher at $116.15

According to Tamas Varga, an oil broker PVM, “Given Russia’s major producers and exporters of crude oil and refined goods, an embargo would cause significant financial distress.”

The EU continues to finance Russia during the conflict, despite the lack of any additional, firm retaliatory actions. Varga explained that the EU had acquired energy worth $60 billion in three months, which is not enough to put financial pressure on the invader.

This is what the EU has admitted to itself. It is still being debated whether sanctions would be the most effective way to sanction Russia. [whether]He said that imposing tariffs would prove more efficient.