EU Sanctions on Russia May Advance Following Political and Policy Changes

Recent political shifts in Hungary and changes in U.S. sanctions policy have increased prospects for the European Union to approve a new package of sanctions against Russia. The sanctions have been delayed due to vetoes and energy disputes but could move forward soon.

U.S. decision to phase out waivers for Russian oil added complexity to the situation.

Following the recent electoral defeat in Hungary, officials in Brussels see an opportunity to resolve the outstanding vetoes and approve the sanctions package, which also includes a €90 billion loan for Ukraine. Although the current leadership is expected to remain in office until May, expectations are focused on the incoming leadership to adopt a more cooperative stance.

The position of Slovakia remains uncertain.

A leader in Slovakia, who has ideological ties with the Hungarian leader, has previously expressed opposition linked to the disruption of oil flows through the Druzhba pipeline rather than the sanctions’ content. Ukrainian President Volodymyr Zelenskyy has reported that repairs to the pipeline, damaged by Russian drones in late January, are expected to restore partial functionality by the end of the month.

This repair could influence Slovakia’s stance on the sanctions.

U.S. U.S. Treasury announced it would not renew sanctions relief measures for Russian and Iranian oil that had been introduced to mitigate disruptions caused by the closure of the Strait of Hormuz. The 30-day permit allowing countries to purchase Russian oil already at sea expired over the weekend.

European officials viewed the U.S. move as unilateral and counterproductive to maintaining pressure on Russia. The International Energy Agency reported that the price of Russian Urals crude has been hovering over $110 per barrel, leading to Russia's revenue from crude and refined products rising sharply to $19 billion in March compared to $9.7 billion in February.

European Commission representatives have stated that providing sanctions relief at this time is not helpful for sustaining pressure on Russia. They also highlighted recent attacks by Russia on Ukrainian cities as a factor supporting the need to approve the sanctions package.

Coordination with International

Partners The sanctions package includes a full ban on maritime services for Russian oil tankers, intended to replace the G7 price cap on Russian oil.

However, discussions at the G7 level have not yet resulted in an agreement. European officials have indicated a preference to align sanctions with international partners for greater impact but have not ruled out proceeding independently if necessary.

Ongoing discussions continue regarding the timing and coordination of the maritime services ban. >"If we put forward a package of sanctions, if we also have the support at the international level by the G7, the better and greater the impact will be. So we always try to align our efforts with the G7," a European Commission spokesperson said.

The developments in Hungary, Slovakia, and the United States could influence the timing and content of the EU sanctions package, which has implications for the ongoing conflict in Ukraine and energy markets.