Hungary's Prime Minister Victor Orban has become Russia's chief supporter in the EU and that support is threatening a break in EU unity.

Orban sent a letter to European Commission president Ursula von der Leyen this week saying his country couldn't support the latest sanctions plan "in its current form."

Orban said the current timeline would require upgrades to supply infrastructure and refineries that would be tough to finance. He argued for waiting until all member states meet those preconditions.

Every EU member has a veto on sanctions.

The latest report said that EU diplomats remain hopeful of a deal, in part because the EU has access to collective funds that Hungary is eager to access.

In April, Orban won a resounding victory in parliamentary elections with a strong majority in the national assembly.

Oil market participants should be watching this very closely. Despite all the diplomats saying this deal is close-to-done, it could fall apart and that would represent a signficant downside for oil at a time when global growth sentiment is already weak.

WTI is roughly flat today at $107.60.