European Union (EU) leaders have agreed on a plan to block more than two-thirds of Russian oil imports.

The ban is a compromise that will not affect pipeline oil imports for now, following opposition from Hungary. European Council Chief, Charles Michel, said the deal cuts off “a huge source of financing” for the Russian war machine. The new agreement forms part of a sixth package of sanctions approved at a summit in Brussels, on which all 27 member states agreed.

Mr. Michel disclosed that the EU also agreed to hard-hitting measures targeting Russia’s largest bank, Sberbank, and three state-owned broadcasters. At the meeting, EU members spent hours struggling to resolve their differences over the ban on Russian oil imports, with Hungary its main opponent.

The compromise followed weeks of wrangling until it was agreed there would be “a temporary exemption for oil that comes through pipelines to the EU”, Mr. Michel told reporters. Due to this, the immediate sanctions will affect only Russian oil being transported into the EU oversea, which is two-thirds of the total imported from Russia.

But in practice, European Commission President, Ursula von der Leyen intimated that the scope of the ban would be wider because Germany and Poland volunteered to wind down their own pipeline imports by the end of this year. “Leftover is around 10-11% that is covered by the Southern Druzhba,” Mrs. Von der Leyen said, referring to the Russian pipeline supplying oil to Hungary, Slovakia and the Czech Republic. However, she added that the European Council will revisit this exemption “as soon as possible”.

A Proposal to ban Russian oil Imports

The ban on Russian oil imports was initially proposed by the European Commission a month ago (April 2022), which is the body responsible for developing laws for member states. But resistance, notably from Hungary, which imports 65% of its oil from Russia through pipelines, held up the EU’s troubled latest round of sanctions.

Other landlocked countries, such as Slovakia and the Czech Republic, also asked for more time due to their dependence on Russian oil. Bulgaria which is already cut off from Russian gas by Gazprom, likewise sought opt-outs.

Other Economic Factors

Reports also suggest that the cost-of-living crisis being felt across Europe has not helped either. Sky-rocketing energy prices, among other things, curtailed some EU countries’ appetite for sanctions which could also hurt their own economies.

Ukraine’s President, Volodymyr Zelenskyy, who dialled into the summit, urged EU countries to stop their internal “quarrels”, stating that they only helped Moscow. Mr. Zelenskyy, speaking at the summit via a video link said “All quarrels in Europe must end, internal disputes that only encourage Russia to put more and more pressure on you”, adding that “It is time for you to be not separate, not fragments, but one whole”.

Latvia’s Prime Minister, Krisjanis Karins, is of the view that member countries should not get “bogged down” in their own personal interests. He pointed out that “It’s going to cost us more. But it’s only money. The Ukrainians are paying with their lives”.