# EU considers more funds for eastern states in bid for deal on Russia oil ban Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-05-09 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: EU Considers Increased Funding for Eastern States to Upgrade Meta Description: The EU may provide extra funds to landlocked eastern EU states to improve oil infrastructure, promoting an embargo on Russian oil. Learn more on the latest URL: https://financedigest.com/eu-considers-more-funds-for-eastern-states-in-bid-for-deal-on-russia-oil-banhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-05-09t145137z2lynxnpei480pjrtroptp4ukraine-crisis-eu-oil-1736815762092-compressed.jpg) By Francesco Guarascio BRUSSELS (Reuters) -The European Commission is considering offering landlocked eastern European Union states more money to upgrade oil infrastructure in a bid to convince them to agree to an embargo on Russian oil, an EU source told Reuters on Monday. The measures are part of a wider package of new sanctions against Russia for its invasion of Ukraine, but the adoption of the legal text still needs an agreement on the size of the investment, the source said, adding another sticking point was Cyprus’s concerns about a proposed ban on the sale of real estate to Russians. Horse trading after the [Commission put forward its original sanctions document last week has delayed approval](https://www.financedigest.com/eu-commission-approves-delay-in-medical-devices-law-to-avert-shortages.html "EU commission approves delay in medical devices law to avert shortages") and the text has already been revised once to try to win over sceptics. A new version, currently being drafted, is likely to drop a ban on EU [tankers carrying Russian oil](https://www.financedigest.com/oil-spills-and-near-misses-more-ghost-tankers-ship-sanctioned-fuel.html "Oil spills and near misses: more ghost tankers ship sanctioned fuel"), after pressure from Greece, Cyprus and Malta, the source said, declining to be named because of the sensitivity of the matter. EU companies would, however, be prevented from offering insurance and other financial [services for the transport of Russian](https://www.financedigest.com/russian-services-activity-shrinks-for-third-month-running-in-dec-pmi.html "Russian services activity shrinks for third month running in Dec -PMI") oil worldwide, the source added, noting that on this point the original proposal would remain unchanged. Whereas most EU states will have to fully implement a Russian [oil embargo by the end](https://www.financedigest.com/oil-set-to-end-turbulent-2022-modestly-higher.html "Oil set to end turbulent 2022 modestly higher") of the year, Hungary – one of the most vocal critics of the new sanctions package – has already obtained an exemption until the end of 2024, as has Slovakia, and the Czech Republic would have until mid-2024. The three countries are the only eastern EU states with no access to the sea, and therefore risk a bigger [economic impact from banning Russian oil](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns"). EU officials [say their concerns are legitimate and are now considering](https://www.financedigest.com/sega-sammy-says-it-is-considering-buying-angry-birds-maker-rovio.html "Sega Sammy says it is considering buying Angry Birds maker Rovio") spending more than initially planned to upgrade and extend pipelines that would deliver oil from other EU countries. The source declined to comment on the size of the investment, but noted it was not to be calculated in [billions of euros](https://www.financedigest.com/mercedes-benz-to-buy-back-up-to-4-billion-euros-in-shares-by-2025.html "Mercedes-Benz to buy back up to 4 billion euros in shares by 2025"), rather far less. The EU is withholding 7.2 billion euros ($7.5 billion) in EU post-COVID recovery funds to Hungary over concerns about the rule of law, and diplomats have said that Budapest may be trying to link the [oil embargo talks with disbursement of the blocked funds](https://www.financedigest.com/oiling-the-wheels-for-a-smooth-funding-cycle.html "OILING THE WHEELS FOR A SMOOTH FUNDING CYCLE"). Dismissing this, the source said [additional funding](https://www.financedigest.com/need-additional-funding-but-not-sure-how-to-go-about-it.html "Need additional funding but not sure how to go about it?") would be provided for pipeline investment and there was still a debate about whether such money could also be used to upgrade oil refineries in eastern European countries, many of which can currently only process Russian oil. CYPRUS The other open issue concerned Cyprus, where many Russians have [invested in property](https://www.financedigest.com/brexit-no-obstacle-as-chinese-overseas-property-investment-doubles.html "Brexit no obstacle as Chinese overseas property investment doubles"), something the EU wants to ban under the new proposals. [Talks are underway about legal issues](https://www.financedigest.com/more-than-one-in-ten-brits-are-embarrassed-to-talk-to-anyone-about-their-money-issues.html "More than one in ten Brits are embarrassed to talk to anyone about their money issues") that would allow a compromise on this, the source said. The ban on insurance and other financial services for tankers carrying Russian [oil is considered a potential serious hurdle to Russian oil exports to China](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") and other trade partners outside the EU, but it is unclear just how effective it would be. Nations with less rigorous sanctions protocols may be in a [position to import Russian oil](https://www.financedigest.com/oil-stocks-thrust-london-shares-to-positive-2023-start.html "Oil stocks thrust London shares to positive 2023 start") using their own flagged shipping and their own national insurance arrangements,” said Marcus Baker, global head of marine & cargo for insurance broker Marsh. ($1 = 0.9486 euros) (Reporting by Francesco Guarascio in Brussels; additional reporting by Carolyn Cohn in London; Editing by Alex Richardson, Mark Potter, Kirsten Donovan) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---