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

The European Union (EU) has adopted the 18th 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 105 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.

Last month, the commission had proposed to lower the oil price cap on Russian crude oil to $45/bbl from $60/bbl and raised the total number of sanctioned shadow fleet vessels carrying Russian oil to 419.

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. The news has lent some support to ICE Brent crude, according to market analysts.

“The EU just approved one of its strongest sanctions package against Russia to date,” Kaja Kallas, Vice President of the European Commission (EC) said on social media platform X (formerly Twitter).

The EU has banned Russia’s Nord Stream gas pipelines, Kallas said. “For the first time, we're designating a flag registry and the biggest Rosneft refinery in India,” she added.

Meanwhile, US President Donald Trump has reportedly dismissed the need for a Senate-backed sanctions bill on Russia, according to market analysts. Trump has instead proposed a 50-day window to reach a ceasefire deal with Ukraine, warning that secondary sanctions would follow if the talks fail.

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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