The European Union's 18th sanctions package aims to further weaken Russia financially. The decision was accompanied by reservations and compromises from member states such as Slovakia, Malta, and Hungary.
Malta did not receive significant promises: the EU explained there was no alternative and the decision would be approved. Restrictions on the transport of Russian oil by Maltese and Greek vessels became problematic, as falling oil prices increased profits for shipowners.
Slovakia demanded guarantees in case its economy faces an emergency as it moves to reject Russian gas by 2027. Ursula von der Leyen sent a letter offering promises of emergency aid and support for new energy routes, but these were not binding commitments and did not include direct financial compensation. It was also stressed that prolonging the blockade could result in reduced EU funding to Slovakia. Ultimately, all countries agreed to support the package.
The key innovation is an automatic 15% reduction in the price for Russian oil based on its average market value. Analysis shows that with oil at $40 per barrel, Russian oil sector income could drop by 90%. This is expected to significantly reduce Russia’s budget revenues, lead to job cuts, and decline in wage tax receipts.
Another important part: a phased ban on purchasing oil products made from Russian oil, which will come into effect after three months. This will give main importers (India, Turkey) time to adjust their logistics. At the same time, the EU aims to strengthen control over the so-called shadow fleet of 109 vessels and will revise its method for monitoring purchase prices by requesting information directly from buyer countries.
China’s oil purchases from Russia are increasing, but China will not fully compensate Russia's losses. There is a risk of layoffs and production stoppages, while the structural trend is clearly towards a reduction in Russian export volumes and revenues.
