The EU Suspends Adjustments to the Price Cap on Russian Oil

As part of the 21st sanctions package, the Council of the European Union decided to suspend the automatic adjustment of the price cap mechanism on Russian oil until July 15, 2027. 

This move aims to curb Russia’s oil revenues amid global market instability caused by the closure of the Strait of Hormuz. An interim review of this decision is also planned to assess its proportionality.

In addition, the European Union is expanding measures against the “shadow fleet.” Another 41 vessels have been added to the sanctions list (in addition to the 632 already under sanctions), as well as 8 organizations and 1 individual from its ecosystem, including, for the first time, a crewing agency that recruits crews for such tankers. The restrictions also apply to support vessels that provide bunkering services, transport military equipment, or carry grain exported from Ukraine.

The oil refining sector has also faced significant restrictions: sanctions have been imposed against 18 entities and 1 individual, including three Russian refineries, a major Belarusian refinery, and a company established to market Belarusian petroleum products in Russia. The EU has established a legal mechanism to prohibit transactions with refineries in third countries that process Russian feedstock. Among the first to fall under this ban (with a six-month delay in its entry into force) was the Georgian refinery in Kulevi. At the same time, five foreign oil traders were also subject to the transaction ban.

As part of the pressure on Russia’s critical infrastructure, sanctions have been extended to a key cross-border energy supplier, a top executive at Russian Railways, as well as two Russian ports and four airports. The new package also requires reporting on the sale of tankers used to transport liquefied natural gas (LNG) and provides for the possibility of imposing new restrictions on their transfer to Russian citizens and companies.

Source: Interfax-Ukraine.