Let's Hit Putin Where It Hurts: EU's Aim for Even Tougher Sanctions on Russia
EU nations aim to inflict economic damage on Putin by artificially reducing oil prices
One month after German Chancellor Merz's visit to Kyiv, the EU Commission rolls out its 18th sanctions package against Russia. The pack's focus is a harsher cap on oil prices, Russia's shady fleet, and the banking sector.
In a statement from Brussels, EU Commission President Ursula von der Leyen proclaimed, "We're ratcheting up the pressure on Russia because toughness is the only language Putin understands." Part of this strategy involves reducing the oil price cap from $60 per barrel to $45 (around €40).
The EU, G7 countries, and Australia had agreed on a price cap for Russian oil in December 2022 to decrease Moscow's income from energy exports. Due to altered market conditions, the Commission sees it fit to lower the cap, Von der Leyen explained. The updated cap will be discussed at the upcoming G7 summit in Alberta, Canada, she added, expressing her confidence in reaching this goal.
The revised sanctions include tighter restrictions on Russia's so-called ghost fleet, with an additional 77 ships added to the sanctions list. Additionally, 22 more Russian banks have been added to the sanctions list. Export bans have been expanded to machinery, metals, plastics, chemicals, and dual-use goods—items that can be used for the production of weapon systems like drones and rockets.
Lithuanian President Gitanas Nauseda raised concerns over sanctions threats during a visit by German Chancellor Friedrich Merz to Kyiv a month earlier, stating, "That's a problem—and it's not just about sanctions' credibility, but our overall support for Ukraine." Nauseda pleaded for a more comprehensive implementation of European sanctions against Moscow.
The EU's intensified sanctions have sparked debate on their effectiveness. EU High Representative Kaja Kallas argued that the last package had "significant" impacts. However, critics argue that the current sanctions are too lenient, with goods still entering Russia that the military uses. Despite the sanctions, Moscow continues to shell Ukrainian cities, albeit slowly, and advance in eastern Ukraine. The effectiveness of the oil embargo and price cap also seems limited, as India and China, Russia's largest oil buyers, refuse to comply.
If asset seizure becomes a reality, the EU Commission is faced with concerns about violating international law and undermining trust in the EU as a financial hub. Meanwhile, in the US Senate, a comprehensive sanctions package against Russia is in progress, which would impose an additional 500% tariff on products from countries buying oil, gas, uranium, and more from Russia. The potential outcome, if EU countries follow suit, could lead to economic hardship within their respective territories.
- EU
- Sanctions
- Ghost Fleet
- Oil Price Caps
- Banking Sanctions
- Wider Trade and Logistics Restrictions
- Cybersecurity Measures
- Diplomatic and Travel Restrictions
- Media Sanctions
Enrichment Data:In addition to currently imposed sanctions, the EU could consider the following measures to strengthen its strategy against Russia:
- Asset Seizure: The potential seizure of frozen Russian assets by the EU to support Ukraine and other qualifying recipients.
- Expanded Financial Restrictions: Imposing further limitations on international transactions and access to financial services for targeted Russian banks and individuals.
- Trade Embargoes: Imposing broader trade embargoes on goods beyond energy, affecting critical sectors like agriculture or metals.
- Export Controls: Expanding sanctions to include restrictions on machinery, technology, and manufacturing equipment exports to Russia.
- Cybersecurity Measures: Strengthening cybersecurity efforts to counteract potential Russian cyber attacks, including restrictions on digital services and tools.
- Diplomatic and Travel Restrictions: Tightening visa policies, reducing the number of Russian diplomatic personnel, and limiting travel to EU countries for certain individuals.
- Media Sanctions: Further restricting the distribution of pro-Russian content within the EU and applying sanctions to Russian media outlets.
- The EU Commission might consider the seizure of frozen Russian assets as a means to further support Ukraine and other eligible recipients, marking a potential expansion of the existing sanctions regime.
- In addition to current financial restrictions, the EU could impose tighter limitations on international transactions and access to financial services for targeted Russian banks and individuals, aiming to exert more pressure on Russia's economically significant entities.
