EU’s 21st Sanctions Package Freezes Oil Price Cap, Hits Russia with Most Listings in 4 Years

The EU approved its 21st package of sanctions against Russia on Thursday, overcoming its latest infighting to land its largest number of blacklistings in four years, with Russia’s financial and energy sectors the primary targets.

Besides the package’s 218 designations, the bloc agreed to freeze the Russian oil price cap at its current level for another year, a measure intended to blunt Moscow’s revenues as the Iran war sends oil prices surging again.

For the first time, the EU also sanctioned vessels assisting Moscow’s oil-shipping shadow fleet, expanding beyond targeting the fleet itself.

“At a time when Ukraine has built military momentum, our sanctions continue to weaken the economic foundations of Russia’s war effort,” EU Commission President Ursula von der Leyen posted on social media.

Other elements, however, were stripped out from the package — the first under Ireland’s EU leadership — under pressure from various member states. Most prominent: Greece’s holdup around providing services for Russian liquified natural gas.

Here’s what to know.

Targeting Russian Banks and Cryptocurrency

The new EU package sanctions 94 Russian banks and 4 cryptocurrency platforms linked to the A7 network, which had already been targeted in previous sanctions designations by the EU, U.K., and U.S.

It also placed 33 Russian and four foreign banks under a transaction ban and prohibited transactions with 14 cryptocurrency platforms in the UAE, Georgia, Panama, the UAE, Marshall Islands, Kyrgyzstan, and Belarus. That means these entities will not be able to send or receive funds to the EU.

• Kaja Kallas, the EU’s foreign affairs chief, said it was “hitting [Vladimir] Putin where it hurts most: cutting off the financial lifelines he relies on to sustain his war.”

Meanwhile, a new authority included in the package will allow the EU to impose a full “third-country ban for crypto asset-services,” which could cut off countries deemed to be helping Russia evade sanctions through cryptocurrencies. Von der Leyen said the measure would “act as a strong deterrent.”

The Oil Price Cap, LNG, and the Shadow Fleet

But the star of the 21st package — and the reason it could not be delayed any longer — is the freezing of the oil price cap at its current level of $44.10 per barrel for another 12 months.

• Mired in debate over the package, the EU had already had to extend the most recent deadline to lock in the price cap from last week to Thursday. 
• If that deadline had been allowed to lapse, the Russian oil price cap automatically would have updated to 15% below the average market price, which would have meant a significant wartime increase. 

Originally, the price-cap freeze was due to last just six months. But the EU reached a compromise with the Greek government after agreeing to drop a full ban on companies’ transporting Russian LNG to third countries. Greece operates the largest merchant fleet in the world, and it argued the ban would harm its maritime services industry.

Additional energy-related measures include:

• sanctions against 41 more shadow fleet vessels, along with eight entities and one individual for their involvement in shadow fleet activities.
• the introduction of legal language to allow for sanctions on vessels providing refueling services to Russia’s shadow fleet.
• designations of 18 entities, including a Belarusian refinery, and one individual for supporting Russia’s oil industry.
• a ban on transactions with a Georgian refinery it accused of “trading and processing” Russian oil, under another new EU authority.

Russia’s Military-Industrial Complex ... but Not Its Soldiers

The package also blacklisted 56 actors involved in Russia’s military-industrial complex. The majority of those (37), the EU Commission said, were directly linked to the production of long-range drones.

At the same time, the EU expanded its export ban to cover drone-related tech, key metals and alloys, and other items that Russia’s military industry relies on.

But a buzzy proposal to ban current and former Russian soldiers from Europe was among the pieces that was weakened in the package’s final version, after reported objections by France and Italy. The package instead only “introduce[d] the basis for a comprehensive visa ban,” with the EU Council to decide when it will “enter into force.”

Critical Infrastructure, Metals, and Two Names Left Out

Bulgaria again reportedly vetoed sanctions against Patriarch Kirill, a Putin ally who leads Russia’s Orthodox Church, as well as against Vagit Alekperov, the founder of sanctioned Lukoil.

But other assorted measures sailed through, including:

• trade restrictions on key Russian revenue drivers, including copper and nickel ores, alkaline earth metals, and car parts.
• sanctioning “major actors” in Russia’s gold sector, plus more in diamonds and mining.
• transaction bans on two additional Russian ports and four airports.
• designating eight individuals for spreading Moscow’s war propaganda.

Ryan Bacic contributed to this report, which has been updated.

Read more from The Brief:

• The U.K. Fined Bank of Scotland for Violating Russia Sanctions. Here’s What Went Wrong.

• Amid Ukraine War, Europeans Power a Russian Drone Project That Looks Like a Pyramid Scheme

• U.K. Drops Anonymity for Sanctions Settlements in a Broader Transparency Push