EU extends Russia sectoral sanctions, as 18th package remains stalled amid energy dispute
The European Union has formally extended its sectoral sanctions against Russia for another six months, maintaining sweeping restrictions on trade, finance, energy and technology through January 2026. However, efforts to adopt a new, 18th package of sanctions remain blocked due to opposition mainly from Hungary and Slovakia over energy security concerns.
EU foreign policy chief Kaja Kallas confirmed the extension on Monday, stating, ‘We will continue to pile pressure on Moscow to end its war in Ukraine. Each sanction weakens Russia’s ability to wage war.’ That decision was adopted unanimously by all 27 Member States.
The extended sectoral sanctions, first imposed in 2014 and significantly expanded after Russia’s full-scale invasion of Ukraine in 2022, include bans on Russian oil imports, the disconnection of major Russian banks from the SWIFT system, and restrictions on dual-use goods and luxury items.
Despite this consensus, the EU has failed to secure agreement on its proposed 18th sanctions package. The new measures reportedly target Russia’s energy revenues, including a lower price cap on seaborne crude oil, sanctions on refined fuel imports from third countries, and penalties on the Nord Stream pipeline infrastructure.
Hungary and Slovakia have jointly opposed the package, citing the risk to their national energy security. ‘Together with Slovakia, we have prevented the adoption of the sanctions package,’ Hungarian Foreign Minister Péter Szijjártó declared late last month, accusing Brussels of attempting to ban Member States from purchasing affordable Russian gas and oil.
However, analysts suggest the veto is strategically motivated.
‘Slovakia’s and Hungary’s concerns are not primarily related to measures proposed under the 18th package. Both are reported to use their veto over the 18th package as leverage against another proposal,’ said Edouard Gergondet, a partner at Mayer Brown in Paris, referring to the European Commission’s plan to phase out Russian gas by January 2028.
Slovak Prime Minister Robert Fico has warned that breaking long-term contracts with Gazprom could cost Slovakia up to €20 billion in penalties. He also criticized the EU’s RePowerEU initiative, which aims to phase out Russian fossil fuel imports by 2027, calling it ‘ideological nonsense’ that fails to account for the energy needs of smaller Member States.
Meanwhile, Daniel Webb, Legal Associate at Bennink Dunin-Wasowicz in Amsterdam, noted the economic motivations behind Hungary’s position, explaining that ‘the continued reliance on Russian gas aids Hungary’s government revenue’, citing research showing that Prime Minister Viktor Orban’s government has become increasingly reliant on domestic corporate allies and taxes earned from the MOL Group, Hungary’s largest oil and gas company.
According to Eurostat data from 2024, Hungary and Slovakia remain among the EU countries most dependent on Russian energy, with over 45% of gas and oil imports sourced from Russia. ‘This helps explain their political sensitivity to sudden regulatory changes,’ Webb observed.
Both countries are arguing that the proposal to phase out Russian gas would have dramatic consequences on their energy supplies, a conclusion that is challenged by the European Commission, which considers that a properly timed ban would not result in shortages or price hikes.
While the Commission insists the energy phase-out is a trade measure requiring only a qualified majority, both Hungary and Slovakia argue it constitutes a sanctions policy and therefore needs unanimous approval from all 27 Member States.
The deadlock reflects broader challenges facing EU sanctions policy.
‘This is a stark reminder of how EU sanctions policy works,’ according to Gergondet. ‘This consensus is starting to erode as there is no more, or little, low hanging-fruit to sanction and any new sanctions will entail more economic pains for Member States.’
Does this mean that the 18th sanctions package is permanently derailed?
‘This move by Slovakia and Hungary does not mean that the sanctions package has been killed off. Negotiations between the Member States will likely continue until a solution to the impasse is found,’ said Sebastiaan Bennink, a partner at the Amsterdam firm, noting that ‘historically, similar deadlocks, such as during the 16th and 17th sanctions rounds, were resolved through carve-outs or phased implementation.’
Meanwhile, the EU has begun exploring alternative approaches to maintain unity.
‘Politically, the Council has recently started to issue conclusions on Ukraine on behalf of 26 Member States. They did so most recently on 26 June,’ when Hungary withheld endorsement, Gergondet noted. He described this as a ‘coalition of the willing’ — a strategy to demonstrate continued support despite disagreements.
Diplomatic efforts to resolve the impasse are ongoing. This week, the European Commission is expected to visit Bratislava and EU leaders plan to revisit the issue at their next summit.
‘Discussions are expected to continue into the next Foreign Affairs Council meeting in mid-July, leaving a short-term gap in the EU’s ability to implement new restrictions,’ Bennink concluded.
Reuters reported that Germany expects the 18th sanctions package to be adopted soon, quoting a government spokesperson as saying: ‘It will now be raised at ambassadorial level and reconsidered after a visit by the Commission to Slovakia later this week.’
