Three sources within the European Union indicated that the European Commission has proposed changes to the anticipated ban on Russian oil in an effort to garner support from hesitant countries. However, strong and vocal objections continue to hinder the Commission's initiatives. The sources told Reuters that the amended proposal, which EU envoys were discussing in a meeting on Friday morning, includes granting Hungary, Slovakia, and the Czech Republic more time to adapt to the ban, as well as assisting those countries in updating their oil infrastructure. One source, who requested anonymity, noted that the revised proposal also includes a transitional period of three months instead of one month before EU shipping companies are banned from carrying Russian oil.
According to the amended proposal, Hungary and Slovakia would be able to purchase Russian oil via pipelines until the end of 2024, while the Czech Republic may continue to buy it until June 2024, unless they obtain oil via a pipeline from Southern Europe earlier. Under the original proposal, EU member states would have to stop purchasing Russian crude oil six months after the decision is adopted and cease imports of refined petroleum products from Russia by the end of the year, with Hungary and Slovakia initially having a deadline until the end of 2023.
An official stated that Bulgaria also requested exemptions, but it was not offered any adjustments to the deadlines, reasoning that “Bulgaria has no legitimate reason.” The official added that the three other countries that received more time "have a real issue."
Diplomats indicated that the discussions have been complex, and it is unclear whether the new proposal will gain the support of all 27 EU countries, which is necessary for the oil ban to take effect. According to one official, the proposed extension before EU shipping companies are prohibited from transporting Russian oil worldwide aims to address concerns raised by Greece, Malta, and Cyprus regarding the impact of this measure on their shipping companies.
Under the original proposal submitted by the Commission on Wednesday, EU companies would have to stop providing shipping, brokerage, insurance, and financing services for transporting Russian oil worldwide within a month. Josep Borrell, the EU's foreign policy chief, stated on Friday that he would call for an extraordinary meeting of the bloc's foreign ministers next week if no agreement is reached by the end of the week.
Hungarian Prime Minister Viktor Orbán had previously stated that he rejected the European proposal because Hungary would need five years and significant investments worth billions of dollars in refineries and pipelines to change its current system, which relies on Russian oil for about 65 percent of its needs. Orbán mentioned that the proposal would be like a "nuclear bomb" dropped on his country's economy and argued that the Commission's proposal would lead to energy being excessively expensive in Hungary, with no remaining energy sources for the country.
In a radio interview, he said that the Commission's President, Ursula von der Leyen, "deliberately or inadvertently attacked European unity," adding, "From the beginning, we made it clear that there is a red line concerning the energy ban. They crossed that line."
Concerns extend beyond the EU, as Hugh Pill, the Chief Economist at the Bank of England, noted that a complete European ban on Russian energy supplies would push inflation in the UK above the 40-year record the country is on track to reach, according to Bloomberg News. In speaking to CNBC, Pill indicated that there are "upward risks" to consumer prices if the EU intensifies efforts to impose sanctions on gas and oil imports from Russia in response to its invasion of Ukraine. The Bank of England expects inflation to reach 10.2 percent in October, the highest rate since 1982. Pill stated that under this scenario, energy costs are expected to stabilize but could be undermined "if we see a ban on Russian gas and oil."
