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The biggest holdout to an EU embargo on Russian oil imports, Hungary, continues to dig its heels in, and has told the other European Union members it would need at least $811 million (770 million euro) to prepare its refineries and pipelines for ditching Russian oil, Bloomberg reported on Tuesday, citing documents it has reviewed and sources with knowledge of the discussions.
In early May, the European Commission officially proposed a full ban on Russian crude and oil product imports, to come into effect by the end of the year. But the EU is still scrambling to find a common position, trying to persuade Hungary and some other central and eastern European countries to drop their opposition to an embargo.
Hungary—whose Prime Minister Viktor Orban held close ties with Putin before the Russian invasion of Ukraine—is the biggest opponent to an EU embargo on Russian oil imports, and has said it would need hundreds of millions of dollars to adapt its refining and pipeline industry in order to accommodate a stop to Russian oil imports.
Orban has said that an oil ban would be like “dropping a nuclear bomb on the Hungarian economy”, while Hungarian Foreign Minister Peter Szijjarto said last week that it would not drop its opposition to a Russian embargo unless it receives hundreds of millions of dollars, necessary to replace Russian oil.
Hungary also wants pipeline oil imports to be exempted from the ban.
The Hungarian opposition to an embargo continued this week. At a meeting on Monday, the foreign ministers of the EU failed to persuade Hungary to drop its veto on an embargo.
Lithuania said that the EU is being “held hostage by one member state,” commenting on the failed talks.
Diplomats now hope that an EU summit on May 30 and 31 could reach a unanimous decision on a ban on Russian oil, to be phased out over six months and with exemptions for central European countries, including Hungary, Slovakia, and the Czech Republic.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com