In a major policy shift signaling a subtle yet significant recalibration of Western sanctions against Moscow, the United States has lifted restrictions that had previously blocked financial transactions related to the construction of Hungary’s Paks-2 nuclear power plant. This unexpected development marks not only a diplomatic win for Hungary but also an indicator of a potentially evolving Western approach toward Russia, particularly in areas deemed critical to civilian infrastructure and energy security.

On June 29, the US Office of Foreign Assets Control (OFAC) issued a general license permitting Russia’s Gazprombank and a range of other major Russian financial institutions to resume transactions connected to civil nuclear energy. Among the beneficiaries of this exemption is Hungary’s Paks-2 nuclear power plant-a flagship project of strategic importance that had been stalled due to US sanctions targeting Gazprombank, the Russian financial conduit responsible for disbursing funds to the project.

Paks-2, launched in 2014, is a critical part of Hungary’s long-term energy plan. Under a bilateral agreement with Russia, the project involves the construction of two new nuclear reactors by the Russian state atomic agency Rosatom. Financing for the project comes primarily from a €10 billion loan from Moscow, intended to cover the lion’s share of the estimated €12.5 billion cost. When completed, the plant is expected to double the capacity of the existing Paks Nuclear Power Plant, which currently supplies about 50% of Hungary’s electricity.

However, US sanctions imposed on Gazprombank in response to Russia’s 2022 escalation in Ukraine had put the project in limbo. The sanctions effectively froze financial channels essential for transferring funds, forcing a........

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