EU fails to agree on Russia oil embargo, to try again Monday before summit

BRUSSELS (Reuters) -The EU failed on Sunday to agree on an embargo of Russian oil, but diplomats but will still try to make progress ahead of a Monday-Tuesday summit on an exemption for pipeline deliveries to landlocked Central European countries, officials said.

However, a senior EU diplomat said there was "still too much detail to sort out" to hope for an agreement before European Union leaders gather in Brussels on Monday afternoon.

The proposed sanctions on oil imports is part of the European Union's sixth sanctions package on Russia over its invasion of Ukraine.

The package includes cutting Russia's biggest bank, Sberbank, off from the SWIFT messaging system, banning Russian broadcasters from the EU and adding more people to a list of individuals whose assets are frozen and who cannot enter the EU.

The whole package has been held up by Hungary, which says an oil embargo would be a body blow to its economy because it cannot easily get oil from elsewhere. Slovakia and the Czech Republic have expressed similar concerns.

Talks on the oil embargo have been going on for a month with no progress and leaders had been keen to reach an agreement for their summit to avoid looking disunited in their response to Moscow.

To break the deadlock, the European Commission proposed that the ban apply only to Russian oil brought into the EU by tankers, leaving Hungary, Slovakia and Czechia to continue to receive their Russian oil via the Russian Druzhba pipeline for some time until alternative supplies can be arranged.

Budapest supports this proposal, officials said, but talks on Sunday snagged on EU financing that Hungary wants to boost oil pipeline capacity from Croatia and to switch its refineries from using Russian Urals crude to Brent crude, officials said.

This will be discussed by EU envoys on Monday morning along with the problem of how to ensure fair competition given the higher prices that member states reliant on shipped Brent crude would face as a result of the sanctions.

(Reporting by Jan Strupczewski abd John Chalmers)