EU Expands Shipping and Tanker Bans in 21st Russian Sanctions Package
nearly two months of negotiations, the EU Member States of the European Commission agreed to the terms of the 21st sanctions package against Russia. While key compromises emerged during the negotiations, it still expands the scope of sanctions on shipping, adds to the list of tankers denied port access, and touches the energy, finance, crypto, and military-industrial segments of the Russian economy.
President of the EU Commission, Ursula von der Leyen, announced the agreements on Thursday morning, July 23, saying they continue to weaken the economic foundations of Russia’s war effort at a time when Ukraine has built military momentum. She pointed to the addition of 32 banks to the sanctions, as well as crypto firms and oil traders. Critically, she noted the sanctions on tankers are being expanded for the first time to service vessels.
The EU is adding 41 more vessels on top of the 632 it has already listed. For the first time, it is adding five bunker vessels that have regularly refueled shadow fleet tankers. It also includes a notification requirement for LNG tanker sales to third countries. However, the commission will review that element in three months to determine if it should be made permanent.
It is also listing Russian ports and an oil refinery. However, after pressure from Greece, it included an exemption that will permit LNG carriers to transport Russian gas to non-EU countries.
The oil price cap is being extended for 12 months, suspending a price adjustment mechanism that was included in the 18th package. This suspension will remain in place for 12 months until July 2027. The commission said the change means that Russia will not be able to benefit from fluctuations in the oil markets due to the current closure of the Strait of Hormuz.
“With each round of sanctions, we squeeze Russia’s economy and its capacity to prolong its illegal war,” commented Kaja Kallas, Vice President of the European Commission the the High Representative for Foreign Affairs and Security Policy.
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The commission asserts that Russia’s budget continues to be under growing pressure. It said that since the start of the war, two-thirds of the liquid assets of Russia’s sovereign wealth fund have been depleted.
The new package still requires final approval by the European Union before it goes into effect. While it was watered down with exemptions from some member states, the agreement is seen as a critical next step in Europe’s efforts to increase pressure on Russia. It comes as both Russia and Ukraine have increased the intensity of their attacks in their current offensives.
