(Bloomberg) -- Some European Union leaders are leaning toward a deal that would ban seaborne oil while temporarily sparing deliveries through a key pipeline to give landlocked Hungary more time, as the bloc tries to reach an agreement on a new sanctions package targeting Russia for its war in Ukraine.
EU governments are discussing a plan with the European Council and European Commission that would make shipments of oil through the giant Druzhba pipeline exempt for a limited period of time from a broader ban on oil deliveries to the bloc, according to people familiar the matter.
The compromise would buy time for Hungarian Prime Minister Viktor Orban to iron out technical details of phasing out pipeline supplies to his country, said the people, who asked not to be identified because the talks are private.
Hungary has for several weeks opposed a proposal that would give it until 2024 to give up Russian oil, almost two years longer than what would be required of most other member states. Since unanimity is required for EU sanctions decisions, Hungary has an effective block on the package, which also includes restrictions on Russian banks, consultancy services and buying real estate.
Budapest indicated that at least 770 million euros ($826 million) would be needed to revamp its oil industry, including investments on infrastructure in Croatia, plus an unspecified amount of additional funds to adapt to potential oil price spikes. The commission, as part of a broader strategy to wean Europe off Russian energy, said it would commit infrastructure investment needs of up to 2 billion euros for member states, but even that potential investment has yet to convince Hungary.
The EU and member states are expected to continue discussing the various options on Friday, according to the people.
Politico reported earlier that some EU leaders were willing to exempt pipeline oil from the sanctions package.
©2022 Bloomberg L.P.
BNN Bloomberg Picks
Spotify's billion-dollar bet on podcasting has yet to pay off
'Hotdogs instead of steaks:' What your Canada Day BBQ will cost with hot inflation
In tight rental market, here's how to prepare for potential increase at renewal
27% of homeowners have a HELOC, half paying down principal: Poll
Beer made from recycled toilet water wins admirers in Singapore
Some Canadian companies expand benefits for U.S. workers after Roe v. Wade overturn