Oil gains from latest EU sanctions against Russia’s oil and energy sectors

The European Union (EU) has adopted the 19th package of economic sanctions against Russia, aimed at limiting oil revenues flowing to its war chest.

IMAGE: Flag of the EU. Getty Images

The EU has agreed on a new package of sanctions against Moscow, targeting an additional 117 vessels that are allegedly a part of the Russia's shadow fleet used to circumvent the price caps set on Russian crude and oil products.

This brings the total number of sanctioned vessels to more than 560, it said.

In June, the EC had proposed to lower the oil price cap on Russian crude oil to $45/bbl from $60/bbl. The price cap on Russian oil, implemented by Washington and its allies (the G7 group of countries), are a strategic measure aimed at reducing Russia's export revenue.

“Major energy trading companies Rosneft and Gazpromneft will now be on a full transaction ban. And other companies will also come under asset freeze,” Ursula von der Leyen, President of the European Commission (EC) said.

The commission has further banned imports of Russian LNG into European markets. Its Vice President, Kaja Kallas, said that the EU would propose a “full prohibition” of Russian LNG imports by January 2027.

“We are now going after those who fuel Russia’s war by purchasing oil in breach of the sanctions. We target refineries, oil traders, petrochemical companies in third countries, including China,” von der Leyen added.

The EC has also targeted Russian banks, crypto exchanges, entities in India and China. “The EU is curbing Russian diplomats’ movements to counter the attempts of destabilisation,” according to Kallas.

A shadow fleet is made up of older vessels that intentionally evade regulations. By assembling a shadow fleet used to circumvent sanctions meant to restrict Russian oil revenues, the country has effectively traded outside the imposed price caps.

By Aparupa Mazumder

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