Jul 21, 2025
The EU's latest sanctions against Russia are focused on implementing a more efficient oil price cap.
The European Union approved an 18th sanctions package against Russia on Friday, targeting its oil and energy sectors due to the ongoing war in Ukraine. The EU will implement a price cap on Russian crude at 15% below its average market price, aiming to improve upon the less effective $60 cap introduced by the G7. EU foreign policy chief Kaja Kallas stated that this is one of the strongest sanctions packages yet, emphasizing the need to increase costs for Russia.
Britain will also participate in the price cap initiative, aiming to reduce Moscow's oil revenues used to finance the conflict. UK finance minister Rachel Reeves highlighted the impact on the Kremlin's funding for the war.
Despite these efforts, Russia has managed to sell most of its oil above the previous cap, leading traders to doubt the effectiveness of the new EU sanctions. Kremlin spokesman Dmitry Peskov dismissed the EU's actions as illegal, noting that Russia has adapted to sanctions.
The sanctions package includes a ban on transactions related to Russia's Nord Stream gas pipelines and includes blacklisting 105 ships in Russia's shadow fleet and certain Chinese banks enabling sanctions evasion. Ukrainian President Volodymyr Zelenskiy deemed the decision crucial as Russia intensifies its attacks.
The EU and Britain have been advocating for a lower G7 cap, but the U.S. has not supported this move, limiting the EU's enforcement power. The EU's ability to restrict trades is hindered by the dominance of the dollar in global oil transactions.
Agreement on the EU sanctions was delayed due to demands from Slovakian Prime Minister Robert Fico, who eventually ended his opposition. Concerns from Greece, Cyprus, and Malta regarding the effect on their shipping industries were resolved as Malta also agreed to the sanctions.
Britain will also participate in the price cap initiative, aiming to reduce Moscow's oil revenues used to finance the conflict. UK finance minister Rachel Reeves highlighted the impact on the Kremlin's funding for the war.
Despite these efforts, Russia has managed to sell most of its oil above the previous cap, leading traders to doubt the effectiveness of the new EU sanctions. Kremlin spokesman Dmitry Peskov dismissed the EU's actions as illegal, noting that Russia has adapted to sanctions.
The sanctions package includes a ban on transactions related to Russia's Nord Stream gas pipelines and includes blacklisting 105 ships in Russia's shadow fleet and certain Chinese banks enabling sanctions evasion. Ukrainian President Volodymyr Zelenskiy deemed the decision crucial as Russia intensifies its attacks.
The EU and Britain have been advocating for a lower G7 cap, but the U.S. has not supported this move, limiting the EU's enforcement power. The EU's ability to restrict trades is hindered by the dominance of the dollar in global oil transactions.
Agreement on the EU sanctions was delayed due to demands from Slovakian Prime Minister Robert Fico, who eventually ended his opposition. Concerns from Greece, Cyprus, and Malta regarding the effect on their shipping industries were resolved as Malta also agreed to the sanctions.