The European Union is considering imposing sanctions against companies in India and China that facilitate Russia's oil trade, as part of a future package of new restrictions, Bloomberg reports, citing sources familiar with the matter, UNN writes.
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US President Donald Trump said over the weekend that he was ready to impose "serious" sanctions on Russian oil if European countries followed suit. The sanctions would target energy trade, which is crucial to financing Kremlin leader Vladimir Putin's war with Ukraine, including buyers from China and India.
EU responds to Trump that it is gradually phasing out Russian fuel15.09.25, 15:45 • [views_3370]
As the publication notes, the US pressure places the burden of responsibility on Europe, which has postponed phasing out Russian gas until 2027 and granted landlocked countries such as Hungary and Slovakia temporary exemptions from its oil sanctions against Russia. However, the share of Moscow's oil in EU imports fell to approximately 3% last year from 27% before the war after sanctions came into force in 2022.
The EU is currently considering a 19th package of sanctions against Russia, which could affect about half a dozen Russian banks and energy companies, as well as Russian payment systems and credit card systems, cryptocurrency exchanges, and introduce additional restrictions on oil trade, as Bloomberg previously reported.
The US proposal, presented to Group of Seven members last week, includes tariffs of up to 100% for China and India. It would also affect Russian oil companies and networks that allow Moscow to transport oil and profit from trade.
According to sources familiar with the situation, G7 representatives are working on a draft of the measures in the coming weeks.
Essentially, the US actions are aimed at strengthening its position on Russia, as requested by Ukraine and Europe, while at the same time pitting the EU against Beijing. Brussels and European capitals may not be interested in escalating relations with China given the bloc's dependence on that Asian country's large market, especially after the introduction of tariffs on the US market, the publication writes. The EU is also seeking to conclude a trade agreement with India.
The EU must also find a way to overcome the resistance of some of its member states, particularly Hungary and Slovakia, which express concerns about the cost of switching to alternative oil supplies. According to another source familiar with the situation, the EU may consider various measures to address these concerns after the abolition of benefits for these countries.
Earlier this year, the EU agreed to ban the import of petroleum products made from Russian oil. This will affect some companies in India and Turkey that import large volumes of Russian oil and export diesel and other fuels to the bloc.
As the publication writes, Trump's message puts the ideological ally of the US president, Hungarian Prime Minister Viktor Orbán, in a particularly difficult position. The Hungarian leader has doubled down on Russian energy imports after Moscow's full-scale invasion of Ukraine and enjoys a temporary exemption within the EU, particularly regarding oil imports. Hungary has also bet on Chinese investments, especially in the automotive and battery sectors, which makes Orbán's support for new EU tariffs on Beijing a difficult task, the publication notes.
The Hungarian government hopes that nothing will come of Trump's threats, given that other European countries may also not be interested in imposing tariffs against China, and the US may not do so independently, a senior Hungarian official said.
At the same time, there are signs that Hungary, which is also a gateway for Russian energy imports to Slovakia, is exploring opportunities to distance itself from Russia amid damage to Russian oil infrastructure, the publication writes.
Last week, Hungary signed a 10-year agreement with Shell Plc for 2 billion cubic meters of natural gas – a largely symbolic volume, given that Hungary's consumption is many times that volume annually. Orbán also visited the United Arab Emirates and Qatar on Friday to discuss energy issues.
A Hungarian official said that previous diversification efforts, including a gas import agreement with Azerbaijan and oil imports via pipeline through Croatia, are now coming in handy.
Whether Orbán will have time to "rest" from his Russian dependence is a key question, believes András Deák, a researcher at the National University of Public Service in Budapest.
He drew parallels with the US decision at the beginning of the Russian-Ukrainian war to impose sanctions against the Russian oil refinery NIS in neighboring Serbia, even though Belgrade has since managed to achieve several last-minute deferrals. Similar sanctions against Hungarian importers of Russian energy, such as Mol Nyrt., which also owns the only Slovak refinery, could cause serious damage to Hungary, he said.
"The US can really checkmate Orbán on Russian energy – if it wants to," Deák said. "The question is whether Trump and Orbán's relationship offers real protection to Hungary if it comes to a critical point."