The European Union’s latest sanctions package targeting Russia faces increasing political hurdles just ahead of a crucial meeting among the 27 member states. The main points of contention center around the proposed reduction of the price cap on Russia’s seaborne crude oil, which the European Commission originally sought to lower from $60 to $45 per barrel to mitigate the Kremlin’s revenue used to support its war in Ukraine. This price cap was intended to be a joint effort with the G7 and the United States. However, the recent G7 meeting in Canada highlighted a lack of unanimous support. Notably, former President Donald Trump, who departed the summit early, has not favored increasing pressure on Russia, leading to concerns within the EU about proceeding without American backing. The situation was further complicated by rising oil prices, largely influenced by the escalating conflicts in the Middle East, prompting EU leaders to reconsider the urgency of the price cap.
As tensions surrounding the oil price cap rise, the underlying narratives within the EU have also diverged. Ursula von der Leyen, the President of the European Commission, emphasized that the existing $60 cap is still serving its intended purpose despite recent oil price increases and downplayed the urgency to lower it. In stark contrast, High Representative Kaja Kallas underscored the necessity of the proposed cap reduction, arguing that the conflict in the Middle East has inadvertently empowered Russia economically. This division has eroded the consensus needed for the sanctions package, leaving several member states uncertain about the future of the proposed oil price cap amid fluctuating market dynamics.
A more profound fracture is emerging between Hungary and Slovakia, who have linked their opposition to the new sanctions package to the EU’s broader goal of phasing out Russian fossil fuels by 2027. This ambitious roadmap, introduced in May, aims to eliminate Russian gas and LNG purchases, raising concerns about energy security and rising costs for these two nations. As landlocked states that depend heavily on Russian energy, both countries have voiced their dissatisfaction with the proposed phase-out, arguing it could negatively affect their economies. They are using their veto power against the sanctions to leverage their demands for reassurances regarding energy security and financial support from the EU.
Hungarian Foreign Minister Péter Szijjártó articulated his country’s resistance to additional burdens placed upon citizens due to further sanctions aimed at supporting Ukraine. His Slovak counterpart, Juraj Blanár, expressed a willingness to negotiate but emphasized the importance of guarantees on how the sanctions would impact Slovakia. Uncertainty remains regarding what these assurances may involve, but potential solutions could range from establishing a special support fund to issuing statements reaffirming energy security commitments for these countries.
The stakes are high as this sanctions debate is set to culminate in the upcoming summit of EU leaders. Hungary’s Viktor Orbán and Slovakia’s Robert Fico plan to advocate for their positions vigorously, with Orbán’s transactional negotiation style often drawing attention for seeking concessions. However, despite the current roadblocks, diplomats remain optimistic about reaching an agreement before the Polish presidency of the EU Council concludes on June 30. The anticipated discussions at Thursday’s summit may clarify positions and potentially smooth the path toward consensus.
Although differing significantly, Hungary and Slovakia’s positions underline the complex interrelations among EU member states regarding energy policy and sanctions. Insights from diplomats suggest that while there are nuances in the arguments posed by these two nations, there is hope for cooperation moving forward. The outcome of the upcoming summit is likely to shape the trajectory of the EU sanctions framework as the bloc continues to navigate its response to ongoing geopolitical tensions and internal disagreements.
