EU adopts 21st sanctions package against Russia, extends oil price cap at $44 per barrel

Oil price cap extended

The centrepiece of the 21st package is the extension of the price cap on Russian oil exports at $44 per barrel for a full year, replacing the previous six-month renewal cycle. Without the agreement, the cap would have automatically adjusted upward, potentially allowing Russian crude to approach international market prices inflated by the conflict in Iran. The European Commission estimates the measure will deprive Moscow of $3.5 billion in revenue. The cap is designed to limit the Kremlin's ability to finance its war in Ukraine while keeping global energy markets supplied.

Greek LNG compromise

The most contentious issue was Greece's demand to continue transporting Russian liquefied natural gas to non-EU countries. Athens, which controls the world's largest merchant fleet, threatened to veto the entire package unless it secured a derogation. After weeks of deadlock, a compromise was reached: Greek shippers may carry Russian LNG to third countries, but only under contracts signed before the February 24, 2022 invasion, and volumes must not exceed 2025 levels, described as the lowest. The exemption is valid for one year and subject to annual review by the Council, requiring unanimity for renewal. The deal exposed divisions within the bloc, as the EU had previously agreed to ban all Russian LNG imports and transfers by January 2027.

Financial and trade restrictions

Beyond energy, the package imposes transaction bans on 33 additional Russian banks and targets 14 cryptocurrency platforms, aiming to close loopholes used to evade existing sanctions. New measures also target vessels in Russia's "shadow fleet", tankers operating under false flags to transport oil and other goods, and introduce trade restrictions intended to weaken Russia's military-industrial base. These steps build on earlier rounds that have already sanctioned large sections of the Russian economy and hundreds of individuals and entities.

Dropped and softened proposals

Several ambitious proposals were abandoned or watered down during negotiations. A plan to ban Russian nationals who fought in Ukraine from entering the EU was postponed until autumn. Bulgaria successfully blocked the inclusion of Patriarch Kirill, head of the Russian Orthodox Church, on the asset-freeze and visa-ban list. Portugal and France opposed ending imports of Russian cod and Alaska pollock, while a broader ban on Russian fish was rejected by multiple member states. These concessions highlight the difficulty of maintaining unity among 27 countries with divergent economic interests.

Reaction from Brussels

European Commission President Ursula von der Leyen welcomed the agreement, linking the sanctions to Ukraine's battlefield progress.

At a time when Ukraine is making advances on the military front, our sanctions continue to weaken the economic foundations of the Russian war machine.

The package, adopted on Thursday morning in Brussels, marks the 21st round of EU sanctions since Russia's full-scale invasion began in February 2022. Diplomats described the negotiations as a marathon, with the final deal struck just before the deadline that would have triggered an automatic loosening of the oil price cap.