EU Tightens the Screws: New Sanctions Target Russian Banks, “Shadow Fleet” & Slash Oil Cap
BRUSSELS, July 19, 2025 – In a significant escalation aimed at crippling Russia’s war machine and closing sanction loopholes, the European Union today unveiled its 18th package of punitive measures against Moscow. The sweeping new sanctions directly target Russia’s financial system, key energy infrastructure, and the clandestine network of tankers used to evade existing oil restrictions, while drastically lowering the price cap on Russian crude.
Targets of Package 18:
- Banking Blackout: 22 additional Russian banks have been added to the sanctions list, effectively severing their access to the EU financial system and significantly hindering their ability to facilitate international transactions supporting the Kremlin. This move aims to further isolate Russia’s financial sector.
- Sovereign Fund Strike: The Russian Direct Investment Fund (RDIF), Russia’s sovereign wealth fund long seen as a vehicle for Kremlin economic strategy and international deals, faces a comprehensive asset freeze and transaction ban within the EU.
- Pipeline Pressure: In a largely symbolic but politically potent move, sanctions are explicitly applied to both Nord Stream 1 and Nord Stream 2 pipelines. While physically inoperable after sabotage, this formalizes their status as sanctioned entities, blocking any potential future repair or use involving EU companies or funds.
- Shadow Fleet Crackdown: A major effort targets Russia’s efforts to circumvent the oil price cap. 105 vessels identified as part of Russia’s oil “shadow fleet” – tankers used to transport Russian oil above the price cap, often with opaque ownership and insurance – are sanctioned. This aims to disrupt the illicit trade and increase shipping costs for Moscow.
- Deep Oil Cap Cut: In the most impactful economic measure, the G7/EU price cap on Russian crude oil is slashed to $47.60 per barrel, down significantly from the previous $60 level. This drastic reduction aims to severely curtail the export revenue Russia relies on to fund its war in Ukraine, bringing the cap far closer to Russia’s production costs. ($47.60 represents the average production cost plus a minimal profit margin, as estimated by EU officials).
EU officials stated the package is a direct response to Russia’s continued aggression in Ukraine and its increasingly sophisticated efforts to bypass existing sanctions, particularly through the shadow fleet. The lowered oil cap is a critical tool to choke off vital revenue streams. The inclusion of the Nord Stream pipelines underscores the EU’s resolve to permanently end energy dependence on Russia.
Expected Impact:
Analysts predict the sanctions will significantly increase pressure on the Russian economy. The banking restrictions further isolate its financial system, the shadow fleet sanctions disrupt crucial oil smuggling operations, and the drastically lowered oil cap directly attacks the Kremlin’s primary source of war funding. Targeting the RDIF strikes at a key instrument of Russian state economic policy.
“This 18th package sends an unequivocal message,“ stated European Commission President Ursula von der Leyen. “We are systematically dismantling Russia’s ability to finance its illegal war and closing the avenues it uses to circumvent our sanctions. The era of easy profits from Russian oil is over.”
The measures come into force following publication in the EU Official Journal, expected within days. Enforcement, particularly of the new oil cap and shadow fleet sanctions, will be crucial to their success.