European Union leaders agreed Monday to block most Russian oil imports due to the invasion of Ukraine.

Why it matters: "This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine," European Council president Charles Michel tweeted. "Maximum pressure on Russia to end the war," he added.

Yes, but: There is an exemption for oil transfers by pipelines after the EU saw some resistance to the proposed oil embargo from landlocked countries, notably from Hungary.

Context: Hungary's Prime Minister Viktor Orbán, a close ally of Russian President Vladimir Putin, had said a fast phasing out of Russia's oil would be like dropping "a nuclear bomb on the Hungarian economy," per the Washington Post.

The big picture: The agreement is part of a fresh sanctions package that disconnects Sberbank, Russia's largest bank, from the SWIFT international banking payment system, bans three more Russian state-owned broadcasters and targets more individuals that the EU says were "responsible for war crimes" in Ukraine, according to Michel.

Editor's note: This article has been updated with more details on the sanctions package.