On July 21, the Veza Public Analytics Center hosted a discussion with Illia Nekhadovskyi, head of the analytical direction of the ANS network, focused on the 18th sanctions package adopted by the European Union. The discussion centered on its impact on the Russian economy, the decision-making process, and the response from key countries.
The package introduces an automatic price reduction for Russian oil—calculating the price at an average benchmark minus 15%. Countries previously objecting (Slovakia, Malta, Hungary) ultimately did not block its adoption. Slovakia received certain EU guarantees for support in case of an energy crisis, but no direct compensation, and was warned of potential funding cuts if sanctions were blocked.
The reduced oil price will significantly affect Russia's budget revenues: experts estimate that if the price remains at $40 per barrel, oil and gas revenues could drop by 90%. Under current conditions, a decrease of 57-62% is expected compared to 2024 levels. The package will also impact oil products made from Russian crude, but restrictions will only take full effect in several months.
Main exporters of oil products made from Russian oil to the EU and US—India and Turkey—are expected to gradually adjust their supply chains. China is increasing purchases for its reserves, but is unlikely to offer comprehensive support to Russia. Notably, the financial sector was targeted: 22 Russian banks were disconnected from SWIFT, though Gazprombank remains to facilitate energy transfers with EU countries.
The discussion also addressed alternative currency settlements, dedollarization and Russia’s use of cryptocurrencies to bypass sanctions. Analysts covered how BRICS countries conduct transactions in their own currencies, but noted the ruble’s minimal role in international dealings.
In conclusion, participants expressed doubts about the real impact of additional tariffs proposed by Donald Trump and the efficacy of further economic restrictions. Experts agreed that despite certain shortcomings, the EU’s 18th sanctions package is one of the most robust in the past two years and significantly limits Russia’s financial capabilities.
