- New EU sanctions target Russia’s shadow oil fleet, set to take effect on the third anniversary of the war.
- EU expands blacklist, adding 73 more tankers, 13 Russian banks, and banning Russian aluminum imports.
- US-Russia peace talks may impact future enforcement, with potential easing of sanctions under the Trump administration.
In a fresh bid to curb Russia’s ability to finance its war efforts, the European Union has approved a new round of sanctions, primarily aimed at Moscow’s shadow oil tanker fleet. The package, set to be formally adopted on February 24—the third anniversary of Russia’s invasion of Ukraine—adds dozens of new ships, banks, and trade restrictions to the EU’s blacklist, reports SP Global.
Expanding the Blacklist: More Tankers and Banks Targeted
The latest EU sanctions package will blacklist an additional 73 tankers used by Russia to transport oil in violation of G7 price cap rules, bringing the total number of banned vessels to over 150.
In addition, 13 Russian banks are being sanctioned, and imports of Russian aluminum into the EU will be prohibited. These steps are intended to squeeze Russia’s oil revenues further and make it harder for Moscow to sustain its war effort.
Russia’s Shadow Fleet: A Growing Challenge for Sanctions
Since the imposition of Western price caps on Russian crude, Moscow has built a vast network of tankers to keep its oil exports flowing.
According to S&P Global’s analysis, 586 vessels—amounting to 57.2 million deadweight tons—were potentially involved in transporting sanctioned Russian oil as of late 2023.
Despite repeated rounds of sanctions, Russia has continued to find ways to circumvent restrictions, highlighting the ongoing enforcement challenges facing Western policymakers.
Oil Price Impact: Sanctions and Discounts on Russian Crude
While the G7 price cap has not completely halted Russian oil exports, it has led to steeper discounts on its crude.
The price gap between Russia’s Urals crude and Brent widened to $15 per barrel on February 18 following US sanctions on over 150 Russian oil tankers in January.
Similarly, ESPO crude, which is exported via the Kozmino port, saw a sharp drop of nearly $10 per barrel after fresh US sanctions, before recovering slightly in mid-February.
US vs. EU Sanctions: Can Brussels Enforce Its Measures Alone?
The effectiveness of EU sanctions has been questioned, particularly when compared to US restrictions, which benefit from the dollar’s dominant role in global trade.
With Donald Trump returning to the White House and pushing for a peace deal with Russia, concerns are mounting that future US support for European sanctions could wane.
Secretary of State Marco Rubio has even suggested that easing EU restrictions could be part of broader negotiations to end the war in Ukraine. If Washington reduces its involvement, Brussels may struggle to enforce its sanctions independently.
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Source: SP Global
