New EU sanctions target Russia's oil cap, financial links
Two EU member states, Hungary and Slovakia, are continuing to oppose the 18th package of sanctions against Russia, which is set to be presented to EU leaders at the Brussels summit later this month.
The European Commission is initially proposing to lower the price cap on Russian oil from $60 per barrel to $45.
The $60 per barrel cap was originally set by G7 countries in December 2022. For it to be fully effective, the cap needs to be re-approved by all seven of the world's most industrialized nations. However, the United States has so far been hesitant to impose additional sanctions on Russia.
According to EU foreign policy chief Kaja Kallas, the $60 threshold has cut Russia's oil revenues by 30%—a crucial reduction for financing its war against Ukraine. Despite this, Russia has built a "ghost fleet" of oil tankers—estimated at over 500 vessels—to circumvent this ban, and the EU has already targeted this fleet. In mid-May, EU officials again threatened massive sanctions if Russia persists in its refusal to accept an unconditional ceasefire, which Ukraine has already accepted in principle. This new sanctions package—the 18th since the Russian invasion of Ukraine began three years ago—still requires unanimous approval from all 27 member states. However, two member states, Hungary and Slovakia, have already voiced their reservations.
Should the sanctions package be adopted at the summit later this month, it will impact financial institutions Moscow uses to attract foreign currency and will support lowering the G7's oil price cap to just $45 per barrel, down from $60.
The goal is to reach a G7-wide agreement when the group's leaders meet in Canada next week. EU member countries are expected to quickly endorse this latest sanctions proposal from the Commission.
One of the most significant measures targets the damaged Nord Stream pipelines. The project will face unprecedented sanctions if all capitals approve them, including new blacklists for companies involved in operating Moscow's vast gas network—a network already crippled by a series of explosions in 2022.
Paradoxically, however, the EU has simultaneously removed Russia from its list of countries considered at high risk for money laundering and terrorist financing, while adding Monaco and Venezuela to the list. The EU also delisted the United Arab Emirates and Gibraltar from that list.
Translation by Iurie Tataru
