The limit is still part of a larger G7 effort to limit Russia's oil exports to nations such as China and India.
The European Union on Friday, July 18, signed off on a comprehensive new set of sanctions against Russia for its continued war in Ukraine. The 18th round of sanctions features one of the bloc's strongest actions yet — a reduced price cap on Russian oil exports and broadened penalties on actors assisting Moscow in fueling its war efforts.
At the center of the new sanctions is a tighter price limit on Russian oil sold to third-party nations. The limit has been lowered to 15% below international market prices, according to EU diplomats. Lowered from $60 per barrel by the G7 in 2022, the new limit will start at $47.6 and can be changed depending on international oil prices. The aim is to limit Russia's capacity to finance its war by throttling its crucial energy revenues.
The limit is still part of a larger G7 effort to limit Russia's oil exports to nations such as China and India. Ship and insurer firms in G7 nations are prohibited from facilitating exports sold at prices higher than the capped one.
The package of sanctions was delayed for weeks by Slovakia, whose Prime Minister Robert Fico has been regarded as Moscow-friendly. But Bratislava relaxed its opposition after Brussels issued "assurances" on gas prices. The EU hopes to eliminate Russian gas imports entirely within a year through the end of 2027.
EU Leaders Pledge Ongoing Pressure on Moscow
EU Foreign Policy head Kaja Kallas stated, "The EU just sanctioned one of its strongest sanction packages to date against Russia. Every sanction makes Russia less capable of fighting a war. The message is very clear: Europe will not stand down in defense of Ukraine."
France termed the sanctions as "unprecedented" and stated that they would compel Russia into a ceasefire. Foreign Minister Jean-Noel Barrot further stated, "With the United States we will compel (Russian President) Vladimir Putin into a ceasefire."
The new package adds blacklisting more than 100 ships in Russia's so-called "shadow fleet" — older tankers employed to circumvent export controls. The EU is also set to permanently shut down the Nord Stream 1 and 2 gas pipelines to ensure they cannot be revived.
New sanctions also hit a Russian-owned refinery that produces oil in India and two Chinese banks that have been viewed as facilitating Russian business. EU officials added additional Russian banks to the list of banned transactions and widened controls on "dual-use" items that can help Russia on the battlefield.
While the EU has so far not been able to persuade U.S. President Donald Trump to endorse the new oil cap, its other G7 partners such as the UK and Canada are likely to support the action.
