Fresh Take: EU's New Sanctions Package Targets Putin's Pocketbook
EU Nations Propose Strategic Reduction of Oil Purchases from Russia to Deter Putin's Influence
Update 18: EU Commission Unveils Tougher Sanctions on Russia
In the wake of German Chancellor Merkel's visit to Kyiv a month ago, the EU Commission rolls out the 18th sanctions package, aiming to squeeze Putin's coffers with a lower oil price cap and targeting the Russian banking sector.
The proposal, put forth by EU Commission President Ursula von der Leyen, envisions a stricter cap on oil prices and scrutiny of the Russian shadow fleet—illicit vessels evading sanctions. Moreover, the Commission plans to slash the oil price cap from $60 per barrel to a bruising $45 (approximately €40).
Political shake-up 🇺🇸 🇷🇺 🇦🇺The EU, G7 nations, and Australia agreed on a price cap for Russian oil in December 2022 with the primary aim of shrinking Moscow's energy export revenues. As market conditions change, the Commission reconsiders the cap, aspiring to create further economic stress for Russia. The Commission President is adamant that the G7 summit next week in Alberta, Canada, will yield the same goal.
Economic pressures 💸 🛢The Commission additionally announces harsher sanctions against 77 ships in the "Russian shadow fleet" and 22 additional Russian banks. Export bans on machinery, metals, plastics, and chemicals are also on the table, along with dual-use goods and technologies. These potential tools can be used for the production of drones, rockets, and weapons.
Criticisms persist 👎There is controversy surrounding the efficacy of the imposed sanctions. EU High Representative Kaja Kallas asserts that recent sanctions packages, particularly the last one, have made significant impacts. Skeptics argue, however, that the measures are too lenient, and critical components continue to pour into Russia, keeping its military operational. Moscow retains the capacity to bombard Ukrainian cities and slowing advance in Eastern Ukraine.
Lithuania's concern 🇱🇹 🛑Lithuanian President Gitanas Nauseda has expressed frustration that the promised sanctions threats during German Chancellor Friedrich Merz's visit to Kyiv a month ago haven't had tangible results. Nauseda believes this undermines both the credibility of EU sanctions and the EU's commitment to Ukraine. He strongly stressed the need for forceful and comprehensive sanctions in the 18th package.
Background
- EU
- EU Commission
- EU Commission President
- Sanctions
- Ghost Fleet
Enrichment Data (15% or less)
The European Union (EU) is exploring various potential additional punitive measures against Russia, including:
- Nord Stream Gas Pipelines Sanctions: The EU ponders a ban on transactions with Russia's Nord Stream gas pipelines, potentially ending the Nord Stream 2 project, to decrease Europe's dependence on Russian gas and convey a powerful message to global liquefied natural gas producers.
- Banking Sector Sanctions: The EU thinks about slapping additional sanctions on more than twenty Russian banks, increasing financial pressure on Russia by limiting its international banking services.
- Oil Price Cap Reduction: The EU plans to cut the oil price cap from $60 to $45 per barrel, seeking to further shave Russia's oil revenues and escalate economic pressure during the ongoing conflict in Ukraine.
- Asset Freezes and Designations: The latest sanctions include asset freezes against numerous individuals and entities, with the 17th package adding 66 individuals and 67 entities to the list, totaling over 2,400 sanctioned individuals and entities.
- Secondary Sanctions: While not explicitly mentioned in the recent discussions, the EU has been considering secondary sanctions against entities circumventing EU sanctions. Such sanctions could target third-party countries or companies.
- Seizing Frozen Assets: The EU is weighing the possibility of seizing frozen Russian assets to support reconstruction efforts in Ukraine or to compensate for losses. This idea, however, requires democratic agreement among EU member states and raises concerns about violating international law and undermining trust in the EU as a financial center.
- The EU Commission, in its 18th sanctions package, aims to tighten economic pressure on Russia by reducing the oil price cap and targeting the Russian banking sector, as part of general-news politics and community policy.
- The proposal includes scrutiny of the Russian shadow fleet, slapping harsher sanctions on ships and banks, and potential export bans, which could lead to economic stress for Russia in the long run, following the EU's ongoing general-news and community policy changes.
