The European Union is expected to sign off on a 90-billion-euro ($106bn) loan for Kyiv after a months-long standoff over the stalled operations of a war-damaged pipeline transporting Russian oil via Ukraine to Europe.

EU diplomats meeting in Brussels gave their preliminary approval for the loan on Wednesday, their move coinciding with the resumption of Russian oil deliveries through the Druzhba pipeline to Hungary and Slovakia.

Recommended Stories

list of 3 itemsend of list

The two EU countries, which had accused Ukraine of dragging its feet over repairs, are expected to receive the first shipments by “tomorrow at the latest”, according to Hungarian oil group MOL, which said Wednesday that Kyiv had confirmed the oil was flowing.

Slovakia’s Economy Minister Denisa Sakova said on Facebook that the first deliveries were expected in the early hours of Thursday.

The development, already signalled on Tuesday by Ukrainian President Volodymyr Zelenskyy, who has said the pipeline was damaged by Russian attacks in late January, allowed Hungary to finally lift its longstanding veto on the EU loan, with the bloc’s 27 member states now expected to formally sign off on it by Thursday.

More sanctions against Russia on the way

The EU agreed to the loan last year to maintain Ukraine’s liquidity through 2026 and 2027, but outgoing Hungarian Prime Minister Viktor Orban, who has maintained cordial relations with Russia since it invaded Ukraine in 2022, and the Slovak government had blocked it.

Ukraine’s prospects of receiving the loan had already improved when Orban lost Hungary’s parliamentary election on April 12. The leader of the winning party, Peter Magyar, has said he will no longer block the EU funds for Kyiv, though he is only expected to formally take power next month.

Resolving the deadlock should enable Brussels to start paying out the loan soon, throwing a financial lifeline to Ukraine more than four years into a costly pushback against Moscow’s full-scale invasion, as Washington withdraws its support and eases pressure on the Kremlin.

Advertisement

Slovak Prime Minister Robert Fico, who has repeatedly clashed with Kyiv and Brussels, said on Wednesday that he “would not be surprised if the 90-billion loan were unblocked and then oil supplies were cut off again”.

Alongside the loan, EU countries are also looking to approve a new round of sanctions on Russia that had also been stalled by both Hungary and Slovakia over the pipeline row.

The new round of economic penalties on Moscow,  the 20th from the EU since the war started in 2022, includes measures targeting Russia’s energy, banking and trade sectors.

The capacity of Druzhba, which in Russian means friendship, is 1.2 million to 1.4 million barrels of oil a day, with the possibility to increase to up to 2 million barrels a day.