European setback: Hungary blocks Russia sanctions and makes oil deliveries conditional

The EU's foreign policy chief, Kaja Kallas, acknowledged a major diplomatic "setback" within the bloc after the 27 member states failed to reach a consensus on imposing a 20th round of sanctions against Russia. This admission came after Hungary vetoed the resolution, at a sensitive time coinciding with the fourth anniversary of Russia's invasion of Ukraine.

In a press statement following a meeting of EU foreign ministers in Brussels on Monday, Callas said, "It's a setback and a message we didn't want to send today, but the work continues." This statement reflects the magnitude of the challenges facing European unity in the face of Moscow, especially as the war continues and resources are depleted.

Background to the conflict: Drogba's oil pipeline

The main reason for Hungary's hardline stance is the issue of energy supplies. Budapest has openly declared its intention to block the adoption of sanctions until Russian oil supplies are resumed via the Druzhba pipeline, which runs through Ukrainian territory. Hungarian Foreign Minister Péter Szijjártó stated that his country would use its veto and would not back down until Kyiv allowed the oil to flow again to Hungary and Slovakia.

Hungary and Slovakia accuse Ukraine of deliberately preventing the pipeline's reopening as a form of political pressure, while Kyiv maintains that the pipeline was damaged by Russian airstrikes. The Druzhba (Friendship) pipeline, built during the Soviet era, is one of the world's longest pipelines and a vital lifeline for landlocked Central European countries heavily reliant on Russian oil.

Financial escalation and loan threats

Hungary's stance wasn't limited to sanctions; it extended to financial support. Hungarian Prime Minister Viktor Orbán confirmed he would also block approval of a vital €90 billion loan to Ukraine, which EU leaders had tentatively agreed to last December. Orbán is also linking this issue to resolving the oil crisis, placing further strain on Ukraine's already struggling economy.

In an attempt to contain the crisis, European Council President Antonio Costa issued a strongly worded letter published on Monday, asserting that "any breach of the commitments agreed upon by the leaders constitutes an attack on the principle of cooperation based on fidelity." Costa and European Commission President Ursula von der Leyen are scheduled to visit Kyiv to discuss these complications with President Volodymyr Zelensky.

Details of the suspended sanctions and their importance

The twentieth round of sanctions was intended to further tighten the noose on the Russian economy, specifically:

• Banking sector: New restrictions imposed on Russian banks to isolate them from the global financial system.
• Energy sector and shadow fleet: The package included measures to prevent the provision of maritime services to Russian oil tankers (known as the shadow fleet), including maintenance and towing services in European ports, with the aim of limiting Moscow’s ability to circumvent the imposed price ceiling.

Despite this setback, French Foreign Minister Jean-Noël Barrot expressed confidence that the package would ultimately be approved, saying, "The question is not whether it will be adopted, but when." Analysts suggest that this delay sends negative signals about the EU's ability to maintain a united front, which Moscow could exploit politically and in the media to bolster its narrative of waning Western support for Ukraine.