The European Commission estimates that the decision to keep the current limit on the price of Russian oil frozen for the next twelve months will result in an additional loss for the Kremlin of around 3.5 billion euros. This measure stands as one of the main economic pillars of the twenty-first package of sanctions approved this Thursday by the EU to intensify pressure on Moscow for the invasion of Ukraine.
According to community sources, the purpose of setting the cap at $44.7 per barrel until July 2027 is to prevent Russia from profiting from the increase in crude prices in international markets following the war in the Middle East, an escalation that would have automatically raised the threshold to around $58 per barrel.
"Our first objective was always to avoid that situation," the same sources indicated, arguing that keeping the cap more than $20 below the market price will allow for the impact of a tool that, according to their calculations, has already cut Russian oil revenues by 30% between 2022 and the end of 2025 and another 20% during the first quarter of 2026.
Thus, Brussels estimates that, using an average price of $60 per barrel and the volume of Russian crude that is still transported with the help of European operators, the extension of the limit will translate into about 3.5 billion euros less for Russian coffers in the coming year.
The community executive maintains that the decision allows for continued pressure on one of the main sources of funding for the Kremlin in an international scenario they describe as "very challenging," marked by strong volatility in energy markets and by the rise in Russian revenues from hydrocarbon exports.
In addition to the oil cap, the new package strengthens restrictions on the energy sector by adding another 36 vessels from the so-called Russian 'ghost fleet' and another five ships that collaborate with this network used to circumvent Western sanctions.
The text also includes new measures against ports and refineries involved in the trade of Russian oil and contemplates the possibility of definitively banning the sale of European LNG carriers to Russia after an initial period of monitoring and control.
Exception for LNG at Greece's request
The package also maintains the limited exemption agreed upon during the negotiation to allow certain operations of transit of Russian liquefied natural gas (LNG) to third countries and the purchases associated with contracts signed before the start of the war, a concession introduced to lift the veto that Greece maintained over the set of sanctions due to the effect that, in its view, a total blockade would have on its merchant fleet.
Community sources have indicated that the Council has finally accepted part of this demand by considering that an immediate ban would have ended up "significantly harming" European operators, as Athens argued, since many of the specialized methane carriers used in this traffic were acquired with financing from Chinese investors and would have passed into the hands of companies from that country, without preventing Russia from continuing to export LNG.
"We know that the risk of a change of ownership is real because we have maintained very close contact with all the European operators affected by these measures," the same sources have pointed out, acknowledging that the exception "is not the desired solution," but emphasizing that it will be subject to continuous supervision and strict reporting obligations for the companies that benefit from it.
In any case, Brussels emphasizes that the repeal is limited to the volumes transported during 2025, must be reviewed unanimously within a year, and keeps the rest of the restrictions on Russian LNG in effect, which —according to the same sources— will force Moscow to use longer routes and other operators, reducing the profitability of these exports.
Greater control over banks and cryptocurrencies
In the financial sphere, the EU expands sanctions to 33 Russian banks through transaction bans, with special attention to regional entities and banks that had taken on the activity of others already sanctioned, in order to close new avenues of evasion. At the same time, it strengthens measures against financial institutions from third countries that facilitate these practices and extends restrictions to cryptocurrency platforms used to circumvent European controls.
The package also incorporates new trade restrictions on materials used by the Russian military industry, as well as the inclusion of another 51 companies from Russia, China, India, Turkey, Kazakhstan, Kyrgyzstan, and the United Arab Emirates in the list of entities accused of contributing to the evasion of European sanctions.