EU Approves €90Bn Loan for Ukraine as Pipeline is Turned on Ending Deadlock

• The European Union (EU) gave preliminary approval to a €90Bn loan package for Ukraine, alongside a new round of sanctions on Russia, bringing an end to months of political deadlock and signalling continued financial and strategic support for Kyiv.
• The breakthrough came after Ukraine resumed pumping Russian oil through the Druzhba pipeline into Hungary and Slovakia, following repairs to infrastructure damaged earlier in the year, which had halted supplies and triggered the dispute.
• Hungary’s veto led by Viktor Orbán had been contingent on restoring oil flows, and its removal was further supported by Orbán’s recent election defeat, opening the door for a reset in relations with Brussels under incoming leadership.
• The €90Bn facility is viewed as critical support for Ukraine’s war effort and economic stability, with around two-thirds allocated to defence spending and the remainder for broader fiscal and economic support, described by Ukrainian officials as “a matter of life and death.”
• Oil flows through the pipeline are expected to gradually resume, with crude deliveries to Slovakia and Hungary restarting after months of disruption, although volumes remain uncertain and supply conditions are fragile.
• However, broader energy risks persist, as ongoing attacks on infrastructure and shifting Russian export strategies continue to disrupt regional supply chains, highlighting the vulnerability of Europe’s energy system despite diversification efforts.
• In a related development, Russia signalled it will halt some oil flows from Kazakhstan to Germany from May 1, citing technical reasons, which could add further pressure to supply routes even as alternative logistics via ports are being utilised.

(Source: BBC)