EU resolves impasse over Russia oil import embargo

By Sabine Siebold and John Chalmers

BRUSSELS (Reuters) - European Union leaders said they had agreed on Monday to cut 90% of oil imports from Russia by the end of this year, resolving an impasse over the bloc's toughest sanction yet on Moscow since the invasion of Ukraine three months ago.

Diplomats said the agreement would clear the way for other elements of a sixth package of EU sanctions on Russia to take effect, including cutting Russia's biggest bank, Sberbank, from the SWIFT messaging system.

"Agreement to ban export of Russian oil to the EU," said European Council President Charles Michel in a tweet at the end of the first day of a two-day summit of the bloc's 27 leaders.

"This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. Maximum pressure on Russia to end the war," he said.

The leaders agreed that the oil embargo would include exemptions for Hungary -- a landlocked country that relies heavily on crude piped from Russia and which had been the main holdout for a deal -- and others concerned about the economic impact of the move.

Earlier, Ukrainian President Volodymyr Zelenskiy chastised the EU leaders in a video address for being too soft on Moscow.

The EU has rolled out five rounds of sanctions since Russia invaded Ukraine in February, demonstrating uncharacteristic speed and unity given the complexity of the measures.

But the struggle over an oil ban exposed a struggle to widen sanctions as the economic risk for Europe grows, because so many countries depend on Russian crude.

Diplomats said the leaders came to a political agreement on an oil embargo, and details would be ironed out later.

Addressing the summit before the agreement on an oil import ban was announced, Zelenskiy denounced the EU's lack of resolve.

"Why are you dependent on Russia, on their pressure, and not vice-versa? Russia must be dependent on you. Why can Russia still earn almost a billion euros a day by selling energy?" Zelenskiy said.

"Why are terrorist banks still working with Europe and the global financial system? Serious questions," he said.