The EU’s 18th sanctions package proposes reducing the Russian oil price cap from $60 to $45 and banning the use of Nord Stream 1 and 2 pipelines.
Additional measures will target vessels in Russia’s shadow fleet transporting crude in violation of sanctions.
The proposal requires unanimous support from EU member states, with Hungary and Slovakia potentially opposing the new restrictions.
The European Commission is set to unveil later on Tuesday its new sanctions package against Russia, which will include a proposal to lower the oil price cap for Russia’s crude to $45 per barrel and to ban the use of Nord Stream infrastructure, sources with knowledge of the plan told the Financial Times.
The new sanctions package, the EU’s 18th round of restrictions since the invasion of Ukraine, is set to include a proposal to significantly lower the price cap on Russian oil—to $45 from $60 a barrel.
The price cap mechanism set by the G7 and the EU stipulates that Russian crude shipments to third countries can use Western insurance and financing if cargoes are sold at or below the $60-a-barrel ceiling.
The 18th sanctions package is widely expected to also include a ban on using Russian energy infrastructure, including both gas pipelines Nord Stream 1 and Nord Stream 2, according to FT’s sources.
More vessels of the so-called ‘shadow fleet’ transporting Russian oil will also be targeted.
The new sanctions proposal has to undergo discussion by EU member states and delegates and diplomats. Sanctions are imposed with unanimous support, which could complicate negotiations. Hungary and Slovakia haven’t been too keen to endorse sanctions on Russia and have signaled they may not be in favor of additional sanctions.
European Commission President Ursula von der Leyen signaled last month that the 18th package of sanctions could include a lower price cap and sanctions against the Nord Stream pipelines.
“We want peace. Now is the time to intensify the pressure until Putin is also ready for peace,” the European Commission President said.
The 18th package of sanctions will include, for example, sanctions on Nord Stream 1 and 2, listing more vessels of the Russian shadow fleet, and lowering the oil price cap, von der Leyen said in May.
By Charles Kennedy for Oilprice.com
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