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EU unleashes 18th sanctions package: Russian banks, oil, and Nord Stream in crosshairs

EU unleashes 18th sanctions package: Russian banks, oil, and Nord Stream in crosshairs Photo: EU approves 18th package of sanctions against Kremlin (Getty Images)
Author: Liliana Oleniak

EU member states have agreed to impose new sanctions on Russia. It includes a lower price ceiling on Russian oil and a series of new financial and trade measures, Euractiv reports.

The package of measures, which became the 18th for the bloc after Russia's full-scale invasion of Ukraine, includes the disconnection of 22 more Russian banks from the SWIFT international payment system and a complete ban on transactions.

Key restriction

A key element of the package approved by the EU ambassadors is a new dynamic oil price cap mechanism that will set a ceiling 15% below the average market price of Russian oil.

According to diplomatic sources, this means that the price will now be reduced from $60 to about $47.60 per barrel and will be reviewed every six months to adapt to changes in market prices.

The new package adds 105 new items to the list of vessels in Russia's so-called shadow fleet, which Moscow has used to circumvent the price cap. The number of banned vessels now exceeds 400.

Sulphur streams

The sanctions package also includes a new ban on transactions related to the Nord Stream 1 and Nord Stream 2 gas pipelines, which have not been in operation since 2022, to prevent the maintenance, operation, or any future use of these pipelines.

The new sanctions further restrict Moscow's access to dual-use technologies, as 26 new organizations that supply the Russian military-industrial complex have been added to the list.

According to diplomatic sources, they include 11 companies from third countries: seven from China, including three in Hong Kong and four in Türkiye.

Ban on buying oil products from India

The package also includes restrictions on Russian oil refined in third countries. A large refinery in India, partially owned by the Russian state oil company Rosneft, has also been blacklisted.

As Bloomberg notes, Europe imports fuel from India, and this Asian country purchases large volumes of Russian oil, so it is important to understand how the restrictions will be applied and monitored.

On July 18, EU countries agreed on the 18th package of sanctions against Russia. The breakthrough came after Slovakia lifted its last-minute veto of the 18th package of sanctions.

Oil prices rose by less than 1% after the EU decided to lower the ceiling on Russian crude oil to $47.60 per barrel.