EU Aims to Tighten Grip on Russian Energy Earnings to Force War Negotiations

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The European Union is aiming to strengthen its sanctions against Russia by proposing a further reduction in the price cap on Russian oil. Ursula von der Leyen, the President of the European Commission, has suggested lowering the cap from the current $60 per barrel to $45, a move designed to more effectively limit the Kremlin’s revenue from oil sales. This measure is part of a broader strategy to curb Russia’s financial ability to sustain its military operations in Ukraine.

The original $60 price cap was set in December 2022 by the Group of Seven (G7) countries when global oil prices were significantly higher, often exceeding $100 per barrel. At that time, the cap aimed to restrict Russia’s income from fossil fuel exports without disrupting global oil markets. However, since then, oil prices have fallen substantially, at one point dropping below $60, which has weakened the cap’s impact and led experts to question its continued effectiveness.

Von der Leyen highlighted that oil exports constitute roughly a third of Russia’s government revenues, making the proposed lowering of the cap a critical step in cutting off one of Moscow’s main sources of funding. She expressed confidence that the G7 nations would support this adjustment at their upcoming summit in Canada, scheduled for mid-June, despite uncertainties surrounding political stances, including those of former US President Donald Trump.

In conversations with key figures such as Republican Senator Lindsey Graham, who has pushed for severe sanctions against Russia—including punitive tariffs on goods from countries importing Russian oil—von der Leyen noted strong alignment on the need to increase economic pressure on Moscow. The goal is to compel Russia to seriously engage in peace negotiations, paving the way for a just and lasting resolution to the conflict.

Beyond the price cap, the EU is targeting Russia’s so-called “shadow fleet,” a growing number of aging and poorly maintained oil tankers used to circumvent sanctions. These vessels transport Russian crude to countries like India, often selling at prices exceeding the sanctioned cap. The EU’s latest proposals include expanding the list of sanctioned ships to more than 400 and, for the first time, imposing sanctions on the captains operating these tankers. This step aims to deter crews from working on such vessels, which typically operate under flags of convenience to avoid regulatory scrutiny.

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EU foreign policy chief Kaja Kallas emphasized that sanctions on the shadow fleet have already had a significant impact, as sanctioned tankers face difficulties accessing ports and essential services such as insurance. This disruption forces Russia to seek alternative vessels at higher costs, which cuts into its profits. Following the EU’s recent ban on nearly 200 additional shadow fleet tankers, reports indicated a 30% drop in Russian oil exports via key maritime routes in just one week.

The European Commission also plans to impose restrictions related to the Nord Stream gas pipelines, which were intended to transport Russian natural gas to Germany. Nord Stream 1 was rendered inoperative after a series of underwater explosions in 2022, an event shrouded in mystery with no party taking responsibility. Nord Stream 2 never became operational due to licensing issues. Despite this, Russia has shown interest in potentially restarting these projects. The EU’s proposed sanctions target the consortium managing the pipelines to discourage any attempts to revive the infrastructure and prevent future revenue generation through these routes.

On the financial front, the EU aims to cut off 22 more Russian banks from the SWIFT international financial messaging system. This move is intended to limit Russia’s ability to conduct cross-border transactions and raise funds. Additional sanctions include an export ban valued at around 2.5 billion euros and freezing the assets of over 20 Russian and foreign companies that are alleged to support Moscow’s war efforts.

Von der Leyen underscored that the overarching objective of these sanctions is to bring Russia to the negotiation table with a serious commitment to peace. Since the war began in early 2022, the EU has already imposed numerous sanctions targeting thousands of Russian individuals, companies, and institutions to disrupt the Kremlin’s war machine. The latest round of measures continues this strategy, aiming to escalate economic pressure until Russia agrees to a genuine ceasefire and engages in meaningful dialogue.

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