The EU’s newest set of sanctions aimed at Russia is facing political hurdles before the gathering of the 27 leaders later this week, raising questions about when and how these economic constraints might get official approval.
Two cracks have emerged in recent days.
The initial point pertains to the price ceiling set for Russia’s sea-borne crude oil, where the European Commission originally suggested reducing it from $60 to $45 per barrel with the aim of diminishing the Russian government’s income from energy sales—a key source funding their military campaign in Ukraine.
Different from other penalties, this cap was crafted and approved by the G7 nations, working closely alongside the United States. Nonetheless, during the recent summit in Canada where G7 leaders convened annually, signs were absent indicating that Donald Trump, who departed one day ahead of schedule, supported lowering the figure.
Following his comeback to the White House, Trump has persistently dismissed requests from Kyiv and Western partners to ramp up the pressure on Russia, despite Vladimir Putin’s refusal to entertain Trump’s suggestion of a 30-day immediate cease-fire without conditions.
The absence of US backing left the EU in a difficult position, trapped between the wish to do it independently and concern about jeopardizing the pioneering initiative.
By the conclusion of the G7 summit, Ursula von der Leyen astonished onlookers as she diminished the immediacy of the action, attributing this shift to the surge in oil costs triggered by the military tensions between Israel and Iran.
The $60 cap “didn’t make much of an impact initially, but recently we’ve observed that the oil prices have increased, indicating that the cap currently in place does fulfill its purpose,” stated the Commission president.
For now, there isn’t much urgency to reduce the oil price ceiling.
However, High Representative Kaja Kallas, who two weeks ago introduced the fresh sanctions together with Von Der Leyen, but has adopted an entirely contrasting stance. They argue that the repercussions of the Middle Eastern conflict are enabling Russia to generate increased profits in the energy sector, thereby strengthening the argument for setting the price at $45 per barrel.
"Given the lack of a definitive directive from the G7, several member nations harbor reservations regarding the proposed oil price cap. Additionally, everyone remains concerned about the prevailing circumstances," Kallas acknowledged following a gathering of foreign affairs ministers on Monday.
However, knowing that the oil prices are increasing, it would be equally problematic if Russia were benefiting from the ongoing conflict in the Middle East and using these gains to fund or escalate its war in Ukraine.
On Tuesday, a spokesperson for the Commission refuted claims of conflicting ideas and maintained that the 18th package, aimed at Russia’s financial sector, the Nord Stream pipelines, and the “shadow fleet,” still stands. originally intended .
The proposal regarding the previous pricing limit remains intact," stated the spokesperson, emphasizing that it was upon the capital cities to "take it ahead.
Following the G7 fiasco and the ongoing Middle Eastern conflict, various diplomats informed Euronews that member countries are divided over whether the lower price ceiling should stay under consideration or be temporarily shelved. Since unanimous agreement is required for approval, the proposed $45 cap is effectively seen as nonviable.
A transactional veto
The second break pertains to Hungary and Slovakia.
The two nations, which have grown more aligned over time, have linked the newest set of sanctions with the proposed roadmap To eliminate all Russian fossil fuels by the end of 2027. Despite both issues being connected to Moscow, they are actually distinct from one another.
The comprehensive plan unveiled in May aims to implement various restrictions with the ultimate goal of completely eliminating all imports of Russian pipeline gas and liquefied natural gas (LNG). These fuels accounted for approximately 19% of the union’s gas usage last year.
As an innovative approach, the Commission has structured the phase-out from the perspective of energy policy, which means it would only necessitate a qualified majority for approval.
"The age of Russian fossil fuels in Europe is drawing to a close," von der Leyen stated.
Hungary and Slovakia, both landlocked nations that continue to depend on Russian natural gas and petroleum, have strongly opposed the roadmap , stating that it would violate their sovereignty, increase consumer costs, and threaten energy security.
As the phase-out cannot be blocked, both Hungary and Slovakia have resorted towards the sanctions, which can be blocked, as a means to further their agenda.
On Monday, Hungarian Foreign Minister Péter Szijjártó stated, 'We refuse to let Brussels make Hungarian families bear the cost of additional support for Kyiv,'
His Slovak counterpart, Juraj Blanár, stated that his nation did not object to the substance of the sanctions themselves, but emphasized it was "extremely important" to connect them with the process of phasing out.
"We can't afford to take such chances, which is why we're seeking assurances about how these adverse effects on the Slovak Republic will be handled," stated Blanár.
It wasn’t instantly evident what form these “assurances” would take in reality.
Diplomats suggested one possibility might involve setting up a dedicated fund aimed at assisting both Hungary and Slovakia in reducing their dependence on Russian energy sources. It’s not unusual for EU countries to seek financial assistance from Brussels in return for offering political backing.
However, the suggested phase-out does not encompass a specific financial allocation, meaning any extra assistance would need to be sourced from another area.
An alternative approach might involve the Commission issuing a declaration accompanied by a roster of pledges. just as it was in January When Hungary threatened to veto the extension of all sector-specific sanctions.
Previously, the dispute arose due to Ukraine’s choice to stop the transiting of Russian natural gas across its land, an action that Hungary and Slovakia firmly opposed. The declaration emphasized “the integrity of the energy infrastructure” as a critical aspect of “EU security,” urging other nations to “uphold this principle.”
Even though the text wasn't binding, it still managed to persuade Budapest to withdraw its objection.
The discussion regarding the 18th round of sanctions is scheduled to escalate to the level of EU heads of state or government this Thursday. It’s anticipated that Hungary’s Viktor Orbán and Slovakia’s Robert Fico will advocate for their respective positions. Notably, Orbán has become known for adopting a deal-making strategy during talks, aiming for contentious compromises and exemptions.
Even with some setbacks, diplomats remain optimistic that they will finalize an accord on the sanctions prior to the conclusion of Poland’s tenure as the president of the EU Council on June 30th.
"We are awaiting the result of Thursday's summit, and I think that the discussion following Thursday will be considerably simpler. We continue to stay positive," stated Ignacy Niemczycki, Poland's secretary of state, on Tuesday morning.
I'd also like to highlight that the stances of Hungary and Slovakia actually differ. Some significant subtleties exist, yet I continue to stay positive.