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European Member States have reached an agreement on a 21st sanctions package against Russia, with which the European Union is once again ramping up pressure on Moscow. The most notable measure is the freezing of the price cap on Russian oil at $44.10 per barrel, meaning that Western shipping companies, insurers, and other market players may only participate in the trade if the selling price remains below that level.
That price cap had been a major point of contention in recent weeks because it is normally adjusted automatically based on the global market price. Due to the recent rise in oil prices—partly as a result of the war in Iran—the cap was at risk of rising, thereby generating additional revenue for the Kremlin. The EU ambassadors have therefore decided to suspend that automatic adjustment for twelve months.
Negotiations had been stalled for weeks, mainly due to Greece. Athens had opposed stricter rules on the transport of Russian liquefied natural gas to third countries, but an exception was ultimately worked out for energy contracts concluded before Russia’s invasion of Ukraine on February 24, 2022.
The new package goes beyond just oil and gas. The EU is expanding export restrictions on goods and technology that could support the Russian military industry. Additionally, more Russian ships, 32 additional banks, crypto companies, and oil traders will be added to the sanctions list. In addition, the so-called “shadow fleet,” which Russia uses to circumvent sanctions, will be further targeted. According to the texts, there will also be an entry ban for Russian war veterans.
European Commission President Ursula von der Leyen welcomed the agreement and stated on X that the sanctions “undermine the economic basis of Russia’s war efforts.” She linked this to Ukraine’s military progress and emphasized that the EU intends to continue weakening Russia economically. Formal approval from the member states is still pending, but this is primarily a final technical step.
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