But first, some breaking news: The EU’s foreign policy chief Kaja Kallas has just told Europe Today that the US-Russia diesel deal is a “gift to Putin”, while defending Ukraine’s right to hit Russian oil refineries.

“The core issue is that Russia should stop this war,” Kallas said. “If we look at the big picture, the majority of the financing of this war comes from oil.”

Asked by our EU editor Maria Tadeo if Ukraine’s President Volodymyr Zelenskyy was right in saying that he would continue strikes on Russian oil refineries, Kallas said: “Yes, if we look at international law, it is clear that it is in defence of Ukraine.” Watch.

Summit primer: EU leaders will in just over an hour kick-off a two-day summit with a discussion on energy prices, which have been skyrocketing amid hostilities in the Middle East, my colleague Jorge Liboreiro writes. Oil remains above $100 per barrel despite a coordinated G7 release, with the International Energy Agency (IEA) warning Wednesday that Europe could face renewed wholesale diesel price rises in the coming weeks.

The Italian and Greek leaders have urged Brussels to relax EU fiscal rules to allow governments to use "temporary and targeted measures" to bring down prices. But more fiscally conservative states warn that loosening the rules risks compounding Europe’s already high deficits and fuelling more market volatility.

Then, China: Leaders are then expected to address the ballooning trade deficit with China, a week after EU trade chief Maroš Šefčovič struck a preliminary deal to curb imports of Chinese hybrid vehicles into the EU and facilitate access to rare earths.

But there’s a sense that more needs to be done. France and Germany have found rare common ground on the issue, pitching a "kill switch" that would cut off China's access to the EU market if the deficit remained unsustainable.

Leaders will have to carefully calibrate how to further balance the lopsided trading relationship without jeopardising the progress made in recent days by floating further measures.

Money talks: The summit’s most contentious moment will come later this afternoon when the EU’s next seven-year budget is put on the table. The talks are shaping up to be painstakingly difficult, as two opposing camps – the frugals on the one hand and supporters of a bigger budget on the other – remain at loggerheads.

European Council President António Costa wants a deal by the end of the year to ensure the complex legislative work can be fully completed before January 2028. But a compromise proposal brokered by Ireland has made both sides unhappy.

The clash of opinions and the unwillingness to compromise bode ill for Costa's ambition to have a unanimous deal in December. Spanish Prime Minister Pedro Sánchez's shock decision to call snap elections adds yet another layer of uncertainty.

"I don't think there will be blood on the walls, but it's important in these sorts of negotiations that leaders feel where the contradictions are," another senior diplomat said. "We are not in a hurry. We need a good deal. We don’t feel any time pressure."

Jorge has more details in this must-read preview. You can also follow our rolling coverage, with all the behind-the-scenes intel, on our live blog.

Zelenskyy ‘betrayed’: Ukrainian President Volodymyr Zelenskyy, who will join the summit tomorrow, said on Wednesday that his country is losing a key ally in the US and admitted feeling “betrayed” by Donald Trump, as relations between Kyiv and Washington hit a new low, my colleague Sasha Vakulina reports.

Asked by British broadcaster Piers Morgan whether Ukraine is losing American support, Zelenskyy replied: “Yeah, but not because of us. We can't be weak.”

“It's painful when President Trump chooses one side, not our side,” he said. Asked whether he felt betrayed, Zelenskyy answered: “Really, yes,” although he stressed that the situation was more complicated than his personal feelings.

US eyes frozen assets: Meanwhile, the FT also reports that US negotiators have proposed that European countries unfreeze some of Russia’s immobilised state assets and transfer them to a financial vehicle controlled by Washington as a means of unblocking stalled peace talks

The plan is reported to have been floated during talks in Miami last week, and rejected outright by European delegates. Oversight over the immobilised assets gives Europe crucial leverage, and the prospect of channelling them directly as a loan to Ukraine will be raised during tomorrow’s talks here in Brussels. The FT has more.

Starlink disruptions: Zelenskyy also last night described the disruption to Ukraine's Starlink connectivity as a “big mistake”, warning that “people will die” unless the service is restored. Ukrainian military operations were disrupted on Wednesday by unstable Starlink connections and speed restrictions, according to Ukrainian military units.

Presidential adviser Serhii Beskrestnov confirmed a speed limit of around 160 km/h on the military-grade Starshield service, which is built on Starlink. The disruption also affected drone operations, including interceptors used to defend against Russian aerial attacks.

By the end of the day, service had reportedly stabilised, although the speed limit remained in place. Questions remained over who had imposed the restrictions in the first place and who had authorised the subsequent improvement.

Former defence minister Mykhailo Fedorov publicly thanked Elon Musk as connectivity improved. But the SpaceX chief executive pointed to President Donald Trump as the ultimate authority, saying Starshield systems were controlled by the US government and decisions on restrictions rested with the American military and, ultimately, the president himself.

France’s Marine Le Pen lashes out at the European Commission, says France cannot keep financing Ukraine

French far-right presidential hopeful Marine Le Pen used a visit to Brussels on Wednesday to lash out at the European Commission, saying she wants to strip powers from the EU and cap France’s net contribution to the bloc’s budget at €5 billion a year.

“Being pro-France does not mean being anti-Europe,” she told reporters during a press conference organised after a meeting of the far-right Patriots for Europe group.

“[The Commission] is like the frog that puffs itself up to seem bigger than the ox,” she said.

Crucially, the far-right leader – whose National Rally party is riding high in the polls ahead of next April’s presidential ballot – also said France could not keep on financing Ukraine due to the “perilous” state of the French economy. The country is facing its highest borrowing costs in nearly 25 years, with 10-year bond yields rising by 100 basis points since the start of the year.

Vincenzo Genovese has the story.

More from our newsrooms

MEPs urge EU to shield International Criminal Court from US sanctions. Lawmakers from across the political spectrum say the EU should activate the Blocking Statute to prevent European companies from complying with measures imposed by the US administration, defined as an "attack by a foreign power." Vincenzo Genovese has more.

EU's methane rules face one-year delay, sparking environmental backlash. The European Commission has proposed delaying methane compliance rules for one year, with environmentalists warning the move will do little to lower energy prices and accusing Brussels of using energy security and competitiveness to justify weakening the Green Deal. Marta Pacheco has the details.

We're also keeping an eye on

Our attention is fully on the European Council summit today. Here’s how the day is expected to roll out:

• The three main European political groups will gather their leaders for pre-summit talks bright and early before the summit kicks off around 10.00 CET. The far-right Patriots for Europe group and the leaders of the so-called Visegrád 4 countries – the Czech Republic, Hungary, Poland and Slovakia – already held pre-meetings last night.
• The EU’s six so-called “frugal” countries are expected to huddle over breakfast to discuss the negotiations on the EU’s long-term budget before the summit kicks off.
• Leaders will discuss energy, economics, and the budget during the day. European Council President António Costa and Commission President Ursula von der Leyen are due to deliver a press conference from the summit at around 19.30 CET.
• Leaders will then regroup over dinner to discuss enlargement.

That’s it for today. Jorge Liboreiro, Sasha Vakulina and Vincenzo Genovese contributed to this newsletter.