By Andrew Gray and Lili Bayer
Brussels (Reuters) -The European Union had agreed on Friday an 18th package of sanctions against Russia about his war in Ukraine, including measures aimed at processing further strokes for the Russian oil and energy industry.
The package aims to lower the price cap of the G7 to buy Russian crude oil to $ 47.6 per barrel, diplomats told Reuters.
“The EU has just approved one of its strongest sanction packages against Russia,” said EU chef of foreign policy Kaja Kallas on X.
“We will continue to increase the costs, so stopping aggression will be the only path ahead for Moscow.”
G7 Price limit so far ineffective
Nevertheless, so far, Russia has succeeded in selling most of its oil above the previous price limit, because the current mechanism makes it unclear who should monitor the implementation of the police, and traders doubt whether the new EU sanctions will considerably disrupt the Russian oil trade.
The package also has a ban on transactions with regard to the Russian Nord Stream Gas Pipelines under the Baltic Sea and in the Russian financial sector.
Kallas said that the sanctions were also aimed at 105 ships in the “shadow fleet” of Russia, the term used by Western officials for ships used to bypass oil sanctions, and “Chinese banks that make the evasion of sanctions possible”.
She didn't mention the banks.
The Ukrainian President Volodymyr Zenskiy called the decision “essential and timely” because Russia intensifies his air war in Ukrainian towns and villages.
And Minister of Foreign Affairs Andrii Sybiha said: “The deprivation of Russia of his oil income is crucial to put an end to his aggression.”
The group of seven Western economic powers has tried to impose a price limit for purchases of Russian oil price since December 2022.
It is intended to ban the trade in Russian crude oil purchased at a higher price by prohibiting shipping, insurance and reinsurance companies to process tankers that wear such crude oil.
US refuses to support Europe on price cap
The European Union and Groot -Britain have pushed to lower the cap over the past two months after a decrease in oilutures has largely made the current level of $ 60 per barrel irrelevant. [O/R]
But the United States have resisted, so that the EU will continue automatically, but without real power to enforce the measure, analysts and oil traders say.
Since the dollar dominates global oil transactions and American financial institutions play the central role in cleaning up payments, the EU has no means to block transactions by refusing access to dollar clearing.
Agreement on the new EU package was stopped for weeks when Slovak Prime Minister Robert Fico demanded concessions from a separate plan to abolish the EU dependence of Russian oil and gas.
Fico announced on Thursday evening that he ended his opposition.
Countries such as Greece, Cyprus and Malta had expressed concern about the effect of the oil price on their shipping industry. But Malta, the last of the trio to hold out, also came on board on Thursday.
(Reporting by Lili Bayer, Andrew Gray, Yuliia Dysa, Julia Payne, Kate Abnett; editing by Sudip Kar-Gupta, Ingrid Melander and Kevin Liffey)
