As the pipeline is turned on to break the impasse, the EU agrees a €90 billion loan for Ukraine.

After months of impasse on a €90 billion (£78 billion) loan seen as crucial European Union backing for Kyiv, Ukraine claims it has begun pouring Russian oil through a pipeline into Hungary and Slovakia. 

The loan and a 20th round of penalties against Russia were preliminaryly approved by EU ambassadors gathering in Brussels shortly after, according to officials. It will be approved by EU leaders on Thursday during an unofficial summit in Cyprus. Even though the cash was agreed upon in December of last year, Viktor Orbán of Hungary vetoed the payment in February after Ukraine claimed that supplies had stopped due to damage from a Russian attack.

Hours after the EU ambassadors started talking about the loan, Ukrainian oil and government sources informed officials in Slovakia and Hungary that pumping had resumed. Before the financing could be disbursed, Orbán had insisted that the oil flow resume, and Ukraine verified on Tuesday that the repairs were finished. 

His 16-year tenure as prime minister came to an end with his election setback last Sunday, which also cleared the air for the EU. Páv Magyar, the country’s next leader, has made mending Budapest’s strained ties with Brussels a top priority. “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.

Taras Kachka, the deputy prime minister of Ukraine, has called the EU cash “a matter of life and death” for Kyiv. Two-thirds of the money will be used to support Ukraine’s defense needs, with the remaining portion going toward more general financial aid.

Energy operator Ukrtransnaft, which manages the Druzhba pipeline in Ukraine, informed Slovak Economy Minister Denisa Sakova that pressurizing the pipeline had started on Wednesday morning and that crude oil would begin to flow into Slovakia on Thursday for the first time since January 27.

A Ukrainian government source was cited as stating that the oil transport had started at 12:35 local time (09:35 GMT), albeit the exact volume of pumping was still unknown.  Mol, a Hungarian energy company, stated that it anticipated receiving the first supply no later than Thursday.Orbán, who will serve as interim leader until early next month, stated over the weekend that “we will no longer stand in the way of approving the loan” once oil flows through the pipeline were resumed. 

Orbán had accused Ukraine of enforcing a “oil blockade” on Hungary and neighboring Slovakia in the lead-up to this month’s fiercely contested election, which he lost. He also claimed that the EU was collaborating with Kyiv against him.

A significant oil tank at Brody in western Ukraine appeared to have sustained significant damage in late January, according to satellite photographs at the time. Kyiv stated that repairs would take some time and added that its engineers had been attacked by Russia. Ukraine has also targeted Russian oil installations, including this week a pumping station in the Samara region connected to the Druzhba pipeline.

EU leaders, who had agreed to grant Hungary, Slovakia, and the Czech Republic an opt-out from the plan, were incensed by Orbán’s decision to back out of last December’s agreement to lend Ukraine a €90 billion loan.The Hungarian leader, who has long been viewed as the EU’s closest ally to Vladimir Putin of Russia, made animosity toward the EU and Volodymyr Zelensky of Ukraine a key component of his unsuccessful election campaign. Zelensky said late on Tuesday that he had spoken with António Costa, the chairman of the European Council, who represents the 27 member states, and Ursula von der Leyen, the president of the European Commission, about how the loan would be unblocked.