EU approves €90bn loan for Ukraine as pipeline is turned on ending deadlock

Ukraine says it has resumed pumping Russian oil through a pipeline into Hungary and Slovakia, bringing to an end months of deadlock over a €90bn (£78bn) loan seen as vital European Union support for Kyiv.

Soon afterwards, EU ambassadors meeting in Brussels gave preliminary approval to the loan, as well as a 20th package of sanctions on Russia, officials said.

It is now expected to be signed off on Thursday.

Although the funding was agreed last December, Hungary's Viktor Orbán slapped a veto on the payment in February after Ukraine said damage caused by a Russian attack had brought supplies to a halt.

Ukrainian oil and government sources told officials in Hungary and Slovakia that pumping had restarted, hours after the EU ambassadors began discussing the loan.

Orbán had demanded the oil start flowing again before the loan could be paid out, and Ukraine confirmed the repairs had been completed on Tuesday.

His election defeat last Sunday also cleared the air for the EU, bringing to an end his 16-year era as prime minister. Hungary's next leader, Péter Magyar, has prioritised a reset in Budapest's poor relations with Brussels.

"Ukraine really needs this loan and it's also a sign that Russia cannot outlast Ukraine," EU foreign policy chief Kaja Kallas said ahead of the ambassadors' meeting.

The EU funding has been described by Ukrainian Deputy Prime Minister Taras Kachka as "a matter of life and death" for Kyiv, and two-thirds of it will be spent on bolstering Ukraine's defence needs while the rest will go on broader financial assistance.

Slovak Economy Minister Denisa Sakova said she had been told by energy operator Ukrtransnaft, which looks after the Druzhba pipeline in Ukraine, that pressurising of the pipeline had begun on Wednesday morning and crude oil would start flowing into Slovakia on Thursday, for the first time since 27 January.

The volume of pumping was not yet clear, but a Ukrainian government source was quoted as saying that the transit of oil had begun at 12:35 local time (09:35 GMT).

Hungarian energy firm Mol said it expected the first supplies by Thursday at the latest.

Orbán, who is acting as caretaker leader until early next month, made clear at the weekend that as soon as oil deliveries through the pipeline were restored "we will no longer stand in the way of approving the loan".

In the run-up to Hungary's bitterly contested election this month which Orbán lost, he had accused Ukraine of imposing an "oil blockade" on his country and neighbouring Slovakia, claiming that the EU was working with Kyiv against him.

Satellite images at the time suggested substantial damage to a major oil tank at Brody in western Ukraine in late January and Kyiv had insisted that repairs would take some time, adding that its engineers had come under Russian attack.

Meanwhile, Ukraine has also targeted oil facilities inside Russia, including a pumping station in Samara region linked to the Druzhba pipeline this week.

Orbán's decision to renege on last December's agreement to provide Ukraine with a €90bn loan had infuriated EU leaders, who had agreed to give Hungary, Slovakia and the Czech Republic an opt-out from the scheme.

The Hungarian leader, long seen as the EU's closest partner to Russia's Vladimir Putin, made hostility towards both Ukraine's Volodymyr Zelensky and the EU central to his failed election campaign. Campaign posters across Hungary portrayed Zelensky alongside Magyar with the message: "They are dangerous!"

Zelensky said on Wednesday that Ukraine was fulfilling its obligations with the EU and that unblocking the €90bn EU funding for Ukraine was "the right signal under the current circumstances".

"It is important that the European support package becomes operational swiftly," he added, although it could still take weeks before funding arrives in Kyiv, Ukrainian media report.

In a separate development, Russia has said it will halt the flow of oil from Kazakhstan that goes through a separate section of the Druzhba pipeline to Germany from 1 May.

Berlin halted deliveries of Russian oil to a refinery near the Polish border at Schwedt in response to the full-scale invasion of Ukraine in 2022, replacing it with Kazakh supplies.

The PCK refinery supplies Berlin and surrounding areas with most of its fuel and heating oil, but Russia has cited "technical" issues in maintaining a flow of Kazakh oil.

Kazakh exports go via a Russian export terminal on the Black Sea at Novorossiysk, which has been hit in recent months by Ukrainian drones.

German economics minister Katherina Reiche said there were alternative supply routes for Schwedt via the ports of Gdansk and Rostock and expressed confidence that it would be able to maintain production.

CORRECTION: An earlier version of this story said the EU ambassadors were meeting in Cyprus, rather than Brussels.