The European Union approved on Friday a new raft of sanctions against Russia over its war on Ukraine, including a lower oil price cap, a ban on transactions with Nord Stream gas pipelines, and the targeting of more shadow fleet ships, EU foreign policy chief Kaja Kallas said.
“The message is clear: Europe will not back down in its support for Ukraine. The EU will keep raising the pressure until Russia ends its war,” Kallas said in a statement.
Kallas said the EU move amounts to “one of its strongest sanctions packages against Russia to date” linked to the war, which is now in its fourth year. It comes as European countries start to buy U.S. weapons for Ukraine to help the country better defend itself.
The European Commission, the EU’s executive branch, had proposed to lower the oil price cap from $60 to $45, which is lower than the market price to target Russia’s vast energy revenues.
The EU had hoped to get major international powers in the Group of Seven countries involved in the price cap to broaden the impact, but conflict in the Middle East pushed up oil prices and the Trump administration could not be brought onboard.
In 2023, Ukraine’s Western allies limited sales of Russian oil to $60 per barrel but the price cap was largely symbolic as most of Moscow’s crude — its main moneymaker — cost less than that. Still, the cap was there in case oil prices rose.
Oil income is the linchpin of Russia’s economy, allowing President Vladimir Putin to pour money into the armed forces without worsening inflation for everyday people and avoiding a currency collapse.
The EU has also targeted the Nord Stream pipelines between Russia and Germany to prevent Putin from generating any revenue from them in future, notably by discouraging would-be investors. Russian energy giant Rosneft’s refinery in India was hit as well.
The pipelines were built to carry Russian natural gas to Germany but are not in operation. They were targeted by sabotage in 2022, but the source of the underwater explosions has remained a major international mystery.
On top of that, the new EU sanctions targeted Russia’s banking sector, with the aim of limiting the Kremlin’s ability to raise funds or carry out financial transactions. Two Chinese banks were added to the list.
The EU has slapped several rounds of sanctions on Russia since Putin ordered his troops into Ukraine in February 24, 2022.
More than 2,400 officials and “entities” — often government agencies, banks, companies or organizations — have been hit with asset freezes and travel bans.
But each round of sanctions is getting harder to agree, as measures targeting Russia bite the economies of the 27 member nations. Slovakia held up the latest package over concerns about proposals to stop Russian gas supplies, which it relies on.
The last raft of EU sanctions, imposed on May 20, targeted almost 200 ships in Russia’s sanction-busting shadow fleet of tankers. Friday’s measures added more than 100 more ships to the list.