What is in the EU's 18th package of sanctions against Russia?

The details of the 18th package of sanctions against Russia for its war in Ukraine were approved by the European Union on Friday. It is aimed at further damaging the Russian oil and energy industries.

OIL PRICE CAPTABILITY

The package includes a price cap for Russian oil, which is intended to reduce Moscow's revenues from energy without causing global markets to be disrupted by cutting off Russian supply.

EU diplomats have said that the EU will set a price cap for Russian crude oil at 15% less than its average market value.

This means that the cap is currently around $47.60 a barrel, which is well below the $60 limit the Group of Seven Major Economies has been trying to impose from December 2022.

The measure is designed to prohibit the trade of Russian crude purchased at higher prices by prohibiting insurance, shipping and reinsurance firms from handling tankers that carry such crude.

The European Union (EU) and Britain are pushing the G7 group to lower the cap, since the oil futures have fallen so much that the $60 cap is largely irrelevant.

The United States, however, has refused to comply, and the EU is left to implement the measure on its own. However, this is not easy, as oil is mostly traded in dollars for which U.S. banks control the payment clearing.

SHADOW FLEET & ENERGY TRADING

EU diplomats have announced that the EU will no long import petroleum products made with Russian crude. However, this ban does not apply to imports coming from Norway, Britain or the U.S.

The EU also sanctioned India's Nayara Oil Refinery, whose main shareholder is Russia's biggest oil producer Rosneft.

After the Czech Republic switched over to non-Russian crude oil this year, the EU agreed to remove the Czech Republic from its exemption to the existing bloc ban on seaborne Russian crude imports. Additional 105 vessels will be prohibited from entering EU ports, locks or transferring oil ship-to-ship. This is to close down the "shadow fleet" (older oil tankers) that were used to transport Russian crude oil and to circumvent sanctions. In a press statement, the Council of the EU did not name the entities, but said that the EU had also sanctioned a private operator of a foreign flag registry and a Russian LNG entity.

The EU has sanctioned more than 400 ships in the shadow fleet.

NORD STREAM

All transactions relating to the Nord Stream pipeline project, which runs under the Baltic Sea, will be prohibited. This includes any goods or services provided to this project.

FINANCIAL SECTOR

The EU will prohibit all transactions with Russian financial institution - which are already excluded from SWIFT, the global financial messaging system.

The Russian Direct Investment Fund, as well as any investments it holds, will be included in the ban.

The aim is to further restrict Russia’s access to foreign exchange and international financial markets.

The EU also agreed to lower their threshold for further sanctions against foreign financial and credit institution that undermine sanctions or support Russia’s war effort.

EXPORT BANS, NEW BLACKLIST ENTRIES

Diplomats have said that the EU will add 26 new entities to its blacklist for circumventing sanctions. These include seven entities in China, Hong Kong, and Turkey.

The list of products that EU countries can't export to Russia now includes chemicals, plastics, and machinery.

DELAYED APPROVAL

This is the 18th package of sanctions imposed by the EU on Russia since Moscow's invasion of Ukraine.

Malta and Slovakia held up approval for several weeks. Slovakia demanded guarantees to protect it from potential losses resulting from an EU plan that would ban the import of Russian gas before 2028. It dropped its veto when the EU gave Slovakia these guarantees this week. (Reporting and editing by Kevin Liffey, Frances Kerry, and Kate Abnett)

(source: Reuters)