Budapest has been holding talks with the EU but has demanded financial support to compensate for the loss of supplies from Moscow as a precondition for supporting an embargo. Brussels and Budapest remain split about funds for refineries following talks on Tuesday, according to Reuters.
It follows previous talks between Hungarian Prime Minister Viktor Orban and European Commission President Ursula von der Leyen.
Hungarian Foreign Minister Peter Szijjarto argued earlier this week that it would cost €18billion (£15,2billion) for Budapest to move completely away from Russian oil supplies.
However, the Hungarian government has suggested during talks with the EU that in the short term a smaller amount could be acceptable.
Mr Orban warned on Tuesday that Budapest would have to significantly overhaul its energy system in order with the loss of Russian oil.
This could include €550million (£464,5million) to revamp its refineries in order to comply with the embargo as well as €220million (£185,8million) for a new pipeline to Croatia.
Hungary has also suggested that it may need more funds to cope with a potential surge in oil prices if the ban on Russian oil goes through, according to Bloomberg.
Brussels is pushing to include an embargo on Russian oil along with plans to cut off coal imports in its sixth package of sanctions following Moscow’s invasion of Ukraine.
However, these measures need to be backed unanimously across the bloc in order to be approved.
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Polish President Andrzej Duda has called for the EU to unlock funds for Hungary to ensure it can back the blockade and avoid severe economic hardship.
He said: “Please remember that it will be hard for the Hungarians to diversify if European recovery funds remain blocked.”
The European Commission has refused to dish out pandemic recovery funds to Budapest and Warsaw due to a row over the rule of law.
Brussels has expressed concerns about corruption and media pressure.
Mr Orban has also faced severe criticism from other member states for his refusal to back the ban, with Lithuania’s foreign affairs minister accusing the country of holding the bloc “hostage”.
Nathan Piper, head of oil and gas research at Investec, told City AM that oil prices would increase regardless of sanctions.
He said: “It is our view the rise in oil prices is more fundamentally underpinned than European gas prices.
“So although the threat of EU sanctions has impacted oil prices they are still to fully come into effect.
”However, lack of access to western technology is likely to reduce Russian production capacity medium term whether or not sanctions are implemented.”