How new EU sanctions could impact Russia | DW News

Key Concepts:

• EU Sanctions against Russia
• Shadow Fleet
• Oil Price Cap
• Energy Security
• Dual-Use Goods
• Swift Payment System
• Circumvention of Sanctions

EU's 18th Sanctions Package Against Russia

The European Union has agreed to its 18th round of sanctions against Russia since the full-scale invasion of Ukraine in 2022. EU foreign policy chief Kaak Kellis announced that the new sanctions package includes measures targeting Russia's shadow fleet and a lower oil price cap.

Slovakia's Initial Blockage and Resolution

Slovakia initially blocked the sanctions package for two weeks, citing concerns that the EU's plan to phase out Russian oil and gas sales would jeopardize its energy security. Slovakia eventually agreed after receiving reassurances from the European Commission regarding measures to safeguard its energy sources.

Key Measures in the Sanctions Package

• Targeting Shadow Fleets: The sanctions include measures targeting oil tankers used by Russia to evade sanctions on oil exports.
• Ban on Refined Russian Oil Imports: The EU will ban the import of Russian oil that is refined in other countries, impacting trade with countries like India and Turkey. Previously, Russia exported oil to these countries, where it was refined and then sold to European countries.
• Lowering the Oil Price Cap: The EU aims to lower the price cap on Russian oil to around $48 USD. This cap prevents European firms from financing or supporting ships transporting Russian oil above the set price. However, the effectiveness of this measure is questionable, especially without the United States' support.

Anticipated Impact on Russia

According to Russia's foreign ministry, the country views these sanctions as routine and manageable. However, disruptions are expected, including a reduction in the number of available shadow tankers and the exclusion of dozens of banks from the Swift payment system. Some companies may also face restrictions on importing dual-use goods.

Limited Impact on Oil Market

Some oil and gas analysts believe that the new price cap will have a limited impact because the EU has few tools to effectively target Russia's shadow fleet. Serious attempts to push Russian oil off the market could lead to price spikes, which would ultimately benefit Russia.

Conclusion

While the EU's 18th sanctions package aims to further restrict Russia's economic activities, its effectiveness is uncertain. The measures targeting shadow fleets and refined oil imports could create some disruptions, but the limited tools to enforce the oil price cap and the potential for price spikes raise questions about the package's ability to bring about real change on the front lines in the near future.