- EU and UK ramp up sanctions by introducing a flexible oil price cap and blacklisting 105 vessels from Russia’s shadow fleet.
- New measures target enforcement gaps, following the G7’s largely ineffective $60 crude cap.
- U.S. declines to support lower price cap, limiting EU’s ability to enforce restrictions through global financial channels.
- Internal EU concerns resolved, with key holdouts like Slovakia and Malta finally backing the 18th sanctions package.
The European Union has approved its 18th round of sanctions targeting Russia, focusing this time on undermining the country’s oil and energy sectors. A key measure includes introducing a flexible price cap on Russian crude oil, set at 15% below its average market value. This approach is intended to strengthen the impact of previous efforts, such as the $60 cap implemented by the G7 nations in December 2022, as reported by Reuters.
EU and UK Tighten Sanctions on Russian Energy Revenues
The European Union has moved forward with one of its toughest sanctions packages yet against Russia, targeting oil revenues that continue to support its military operations in Ukraine. EU foreign policy chief Kaja Kallas emphasized the bloc’s commitment to increasing pressure, stating the goal is to make halting the conflict the only viable option for Moscow.
The United Kingdom also aligned with the EU’s revised price cap strategy, aiming to restrict Russia’s ability to fund the war. UK finance minister Rachel Reeves, speaking at a G20 summit in South Africa, described the joint effort as a step to further cut off Russia’s most significant revenue stream.
Despite earlier efforts from the G7 to enforce a $60 price cap on Russian crude, enforcement challenges have allowed Russia to continue selling most of its oil above that threshold. Traders remain skeptical that the new EU measures—which propose a moving cap set 15% below market averages, currently around $47.60 per barrel—will cause a major disruption in exports.
Kremlin spokesman Dmitry Peskov dismissed the sanctions, reiterating Moscow’s stance that such restrictions are illegal. He added that Russia has grown accustomed to operating under sanctions and has developed resilience to their effects.
Beyond oil, the latest EU package also includes a ban on transactions linked to the Nord Stream gas pipelines and further restrictions targeting Russia’s financial sector.
Expanded Measures Target Shadow Fleet and Sanctions Evasion
As part of the expanded sanctions, the EU has blacklisted 105 vessels from Russia’s so-called “shadow fleet”—a term used by Western officials to describe ships used to bypass existing oil restrictions. Several Chinese banks accused of enabling sanctions evasion were also added to the list, though not named publicly.
Ukrainian leaders welcomed the move, with President Volodymyr Zelenskiy calling it “essential and timely” amid intensified Russian air strikes. Foreign Minister Andrii Sybiha stressed the importance of cutting off oil revenues to halt the aggression.
Despite strong support from the EU and UK to lower the existing G7 price cap, the United States has chosen not to back the change. Due to the dominant role of U.S. financial institutions and dollar-based transactions in global oil trade, the EU faces limitations in enforcing the new cap on its own.
Approval of the sanctions package was delayed by political negotiations within the EU. Slovakian Prime Minister Robert Fico initially withheld support, seeking concessions on separate energy matters, but later withdrew his objections. Concerns from Greece, Cyprus, and Malta—nations with major shipping industries—also slowed progress. Malta was the final member to give its approval.
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Source: Reuters
