European Union ambassadors approved a $97 billion loan package for Ukraine on Wednesday, clearing a major hurdle after Hungary dropped its long-standing veto.

The decision came hours after Ukraine resumed pumping Russian crude oil through the damaged Druzhba pipeline to Hungary and Slovakia, resolving the key sticking point. EU diplomats launched written procedures for final sign-off, expected by Thursday afternoon, at an informal summit in Cyprus presided over by the bloc's rotating presidency.

The loan, first agreed by EU leaders in December 2025, aims to cover two-thirds of Ukraine's financial needs in 2026 and 2027 amid its ongoing defense against Russia's invasion. It consists of two interest-free $48.6 billion tranches, with roughly $64.8 billion earmarked for military support and $32.4 billion for budget needs. The EU will borrow the funds on capital markets, backed by its common budget, with repayment expected from frozen Russian assets or reparations once the war ends.

Hungary's Viktor Orbán had blocked the package since February, demanding restoration of oil flows through the Druzhba pipeline, which supplies 1.2 to 1.4 million barrels per day to Budapest and Bratislava. The pipeline was damaged by Russian drone strikes in late January, prompting Ukraine to repair it under EU pressure. Pumping restarted Wednesday morning, with oil expected to arrive by Thursday. Orbán, now a caretaker after his party's election defeat earlier this month, stated he would no longer obstruct the loan once flows resumed.

The European Parliament had endorsed the legislation in February by a vote of 458 to 140. Hungary, Slovakia, and the Czech Republic received opt-outs from contributing to the borrowing due to their reliance on Russian energy.

Ukrainian President Volodymyr Zelenskyy welcomed the move, noting Ukraine had fulfilled its pipeline obligations. "The EU asked Ukraine to repair the Druzhba oil pipeline, which had been destroyed by Russia. We have repaired it," he said, urging swift implementation. EU foreign policy chief Kaja Kallas emphasized the loan's urgency, saying Ukraine needs the funding and that it signals Russia cannot outlast Kyiv.

Ambassadors also approved the EU's 20th sanctions package against Russia, targeting over 40 additional ships, regional banks, crypto platforms, and roughly $1 billion in goods to curb Moscow's war funding. The first loan tranche could reach Kyiv by late May or early June, providing critical relief as U.S. support wanes.

This package builds on more than $208 billion in prior EU aid, underscoring the bloc's continued financial and military backing of Ukraine.