Greek objections and the LNG compromise

The 21st sanctions package had been stalled for weeks by Greece, which objected to a proposed ban on EU-based companies transshipping Russian liquefied natural gas to countries outside the bloc. Greek shipping firms, notably Dynagas, argued they would lose customers to non-EU competitors and that the measure would barely hurt Russia. Athens initially demanded an indefinite exemption. The compromise reached on Thursday morning allows contracts signed before Russia's full-scale invasion of Ukraine on 24 February 2022 to remain in force. The exemption is granted for one year and will be renewed automatically each year, effectively giving Greek tankers a long-term reprieve. A diplomat told Reuters that member states showed solidarity with Greece and expect Athens to reciprocate in the future.

“This is not the end of the sanctions.”

Oil price cap frozen at $44

A central element of the package is the extension of the price cap on Russian crude oil at $44 per barrel for another 12 months. Without a decision, the cap would have expired on Friday 24 July, and the automatic six-monthly revision mechanism would have pushed it significantly higher, reflecting elevated global market prices. That would have handed Moscow a substantial revenue boost to fund its war against Ukraine. By freezing the cap, the EU aims to keep pressure on the Kremlin's oil income. The urgency of the deadline helped concentrate minds among the 27 ambassadors.

Financial sector and military-industrial targets

The package adds 32 Russian banks and cryptocurrency firms to the EU sanctions list, cutting them off from the European financial system. Export restrictions are tightened to prevent EU-made components from ending up in Russian weapons. Kaja Kallas, the EU's foreign policy chief, described the measures as far-reaching, targeting Moscow's financial system, its military-industrial complex and the energy sector that keeps the Russian war economy running.

“We hit Putin where it hurts most: we cut off the financial lifelines on which he relies to finance his war.”

Shadow fleet and other measures

Thirty additional tankers from Russia's so-called shadow fleet, used to secretly transport oil in defiance of sanctions, are blacklisted, bringing the total to 632 vessels. These ships are now barred from EU territorial waters, and vessels that supply them with fuel, food or other services are also placed on the blacklist. The package originally included a ban on importing certain fish species such as cod, but that was removed under pressure from fish-processing member states. A proposal to deny visas to Russians who have served in the military was also dropped after Italy and France raised concerns about the impact on their tourism sectors.

Russian banks and crypto firms added to list32

New tankers from shadow fleet blacklisted30

Russian banks and crypto firms added to list

32 entities

New tankers from shadow fleet blacklisted

30 entities

Data from the article text

Reactions and next steps

European Commission President Ursula von der Leyen said on social media that the sanctions weaken the economic foundations of Russia's war effort. The deal was brokered under the Irish presidency of the Council of the EU, which began in July. Diplomats noted that after 20 previous sanctions packages, the latest round was especially difficult because the measures now hurt EU economies as well as Russia's. Hungary, traditionally a holdout, cooperated this time following a change of government in Budapest. Formal approval by member states was expected later on Thursday. Kallas stressed that the EU must be ready to respond to any further escalation by Russia, signalling that more sanctions could follow.