EU plans tougher sanctions on Russian crude
In its next sanctions package, the European Union is planning a mechanism to dynamically adjust the price cap on Russian oil in response to market fluctuations, Bloomberg reported on July 11.
According to the report, EU member states are considering a proposal to lower the cap for Russian oil, which is currently set at $60 per barrel. Brussels is also proposing an automatic price cap review every three months based on market conditions. Some of Ukraine’s Western partners previously called to revise the cap after global oil prices have briefly fallen below the $60 threshold set by the G7 in late 2022–early 2023.
Earlier obstacles to these proposed EU restrictions included reluctance from Greece, Malta, and Cyprus, but sources now say those countries are open to the idea. Under the new plan, the cap on Russian oil would be set at 15% below market prices, which are calculated using a 10‐week average. Sources said the cap would initially fall to roughly $50 per barrel.
However, these sanctions need unanimous approval from EU member states before they can take effect. As it stands, the 18th sanctions package is currently stalled by Slovakia. Bratislava is seeking EU compensation for a gradual phase-out of Russian gas. One source said EU officials are prepared to offer such assurances to Slovakia if it lifts its veto.
On June 24, Ukrainian President Volodymyr Zelenskyy called for a cap of $30 per barrel on Russian oil, arguing that the only way to compel the Kremlin to stop the war was to strangle its revenue sources.
The EU previously postponed lowering the price cap to $45, fearing energy market instability caused by Iran and Israel exchanging air strikes.
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