EU Moves Toward Major Ukraine Loan as Oil Flow Resumes Through Key Pipeline

BY EMMANUEL OGBONNA

The European Union moved closer on Wednesday to approving a substantial financial lifeline for Ukraine, as the resumption of oil flows through a crucial pipeline to Central Europe removed a major political obstacle that had delayed the decision for months.

Officials confirmed that oil shipments had restarted through the Druzhba pipeline, a vital route supplying Hungary and Slovakia with Russian crude. Ukraine’s pipeline operator, Ukrtransnaft, informed both governments that deliveries were underway and expected to reach their destinations early Thursday. The development is significant because, unlike most EU member states that have reduced or eliminated reliance on Russian energy, Hungary and Slovakia continue to depend heavily on these imports.

The renewed flow appears to have unlocked progress in Brussels. EU envoys initiated a formal political procedure required to approve the proposed loan package. Under EU rules, member states have a 24-hour window to submit written objections. If none are raised among the bloc’s 27 nations, the funding could receive final approval by Thursday afternoon, coinciding with a gathering of EU leaders for a summit in Cyprus.

In parallel, diplomats indicated that a new round of sanctions targeting Russia may also be finalized on Thursday, marking another step in the bloc’s ongoing effort to increase economic pressure on Moscow.

The financial package, valued at 90 billion euros (approximately $106 billion), is seen as critical for Ukraine’s economic stability as the country continues to grapple with the consequences of prolonged conflict. First agreed in December, the loan is intended to sustain government operations, support reconstruction efforts, and bolster Ukraine’s capacity to resist Russian military pressure over the next two years.

However, the path to approval has been fraught with political tensions. Hungary had insisted that oil deliveries through the Druzhba pipeline must resume before it would lift its objections to the funding. Slovakia, meanwhile, had refused to endorse additional sanctions on Russia, citing concerns tied to the same dispute.

For months, both countries accused Ukraine of failing to repair the pipeline infrastructure, a claim Kyiv has contested. Ukraine, backed by most EU partners, has been reluctant to facilitate the continued transit of Russian oil, arguing that such flows indirectly finance Moscow’s war effort, now entering its fifth year.

Ukrainian President Volodymyr Zelenskyy signaled cautious optimism following the latest developments. In a statement posted on social media, he said Ukraine had met its commitments and expressed expectations that European partners would reciprocate. He described the potential approval of the loan as an important signal under current conditions, emphasizing that meaningful pressure on Russia must be maintained alongside sustained support for Ukraine.

Despite the apparent breakthrough, divisions within the EU have underscored the complexity of aligning economic, political, and security priorities across the bloc. Earlier plans to use frozen Russian assets as collateral for the loan collapsed after Belgium, which holds the majority of those assets, declined to support the proposal.

A compromise reached in December allowed the EU to pursue borrowing on international markets without requiring participation from certain member states, including Hungary, Slovakia, and the Czech Republic. Yet that agreement later unraveled when Hungary renewed its objections, linking its position to the unresolved pipeline dispute and domestic political considerations during a closely watched election campaign.

Tensions have also extended to the proposed sanctions package. Since February, Hungary and Slovakia have blocked efforts to introduce new punitive measures against Russia. Slovak Prime Minister Robert Fico reiterated on Wednesday that his government would not support additional sanctions unless the pipeline was fully operational again, warning that trust between Slovakia and Ukraine had been significantly strained.

Nevertheless, there are signs of a shift. Slovakia’s economy minister, Denisa Saková, confirmed that the government had been notified of the resumed oil flows and expects supplies to normalize shortly. The development may ease Bratislava’s concerns and pave the way for broader agreement within the EU.

As EU leaders prepare to convene, the convergence of restored energy supplies and renewed diplomatic momentum suggests that a long-delayed financial package for Ukraine—and potentially new sanctions on Russia—could soon be finalized, marking a critical juncture in Europe’s response to the ongoing conflict.