The European Union has reached a new agreement on its 18th sanctions package against Russia, tightening restrictions with a revised and lower price cap on Russian crude oil — a key source of revenue for the Kremlin’s war effort in Ukraine.
The move comes amid growing international pressure and renewed threats from U.S. President Donald Trump to impose harsher sanctions on Moscow, following President Vladimir Putin’s continued refusal to engage in meaningful peace talks with Kyiv.
At the heart of the EU’s fresh sanctions is a downward revision of the oil price cap initially introduced in December 2022. That original measure, agreed by the G7 and EU, sought to limit how much non-G7 countries could pay for Russian crude and oil products while still accessing shipping, insurance, and other logistical services from G7 firms. The aim was to strike a balance between curbing Russia’s oil revenues and avoiding global supply disruptions.
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The cap previously stood at $60 per barrel, but according to four EU officials who spoke to CNBC, the new dynamic threshold will be set just above $47, reflecting current market prices and allowing for future adjustments in line with oil price trends.
European Commission President Ursula von der Leyen confirmed the development in a statement on Friday, declaring that the new package strikes “at the heart of Russia’s war machine” by targeting key sectors such as banking, energy, and defense.
“I welcome the agreement on our 18th sanctions package against Russia. We are striking at the heart of Russia’s war machine. Targeting its banking, energy and military-industrial sectors and including a new dynamic oil price cap,” she said.
The EU’s top diplomat, Kaja Kallas, added that this was the first time the bloc had targeted Russian oil operations outside its territory, with sanctions now extending to Rosneft’s largest refinery in India — a major processing point for Russian oil sold to Asian buyers.
The decision follows weeks of quiet diplomacy and behind-the-scenes negotiations, particularly as President Trump ramps up pressure on U.S. allies to intensify efforts against Moscow. Trump, who initially took a less confrontational approach to the Kremlin compared to his predecessor, Joe Biden, has hardened his stance in recent weeks. His administration has grown increasingly frustrated with stalled ceasefire negotiations and Putin’s defiant tone, prompting Trump to float the possibility of broader penalties, including actions against countries that continue to import discounted Russian crude.
Senator Lindsey Graham recently suggested that Congress might back Trump with legislative tools to “end this bloodbath,” potentially targeting third-party buyers and companies facilitating Russian oil sales outside the price cap.
Despite multiple rounds of sanctions, Russia has managed to sustain oil exports through a network of shadow fleets, shell companies, and alternative financial arrangements. Much of its crude now flows to India and China, often through opaque deals beyond the reach of G7 enforcement mechanisms. However, analysts believe that the latest sanctions — particularly the lower price cap and new pressure from Washington — could mark a turning point.
Russia’s crude production in June averaged 9.19 million barrels per day, according to the International Energy Agency. However, much of that output is sold at discounted rates and now faces tighter restrictions, potentially reducing Moscow’s revenue stream at a time when its military spending continues to climb.
Global oil markets remain volatile, with additional pressure from geopolitical flashpoints. Tensions between Iran and Israel have amplified fears of disruptions in the Middle East, while lower Russian output could further squeeze supplies in the months ahead.
The move by Europe and the U.S. underlines unity in fresh economic pressure on the Kremlin. However, the challenge lies in how effectively the new cap is enforced, and whether countries like India — which has defended its purchases of Russian oil as necessary for energy security — will comply or face retribution.