EU proposes new sanctions on Russian oil, 'shadow fleet', fisheries and soldiers

The European Commission has proposed a fresh round of sanctions against Russia, targeting oil sales, the "shadow fleet", banks, cryptocurrency firms, metals, fish products and soldiers who have taken part in the full-scale invasion of Ukraine.

The proposal, unveiled on Tuesday by Commission President Ursula von der Leyen, comes as Kyiv's allies consider new ways to revive the stalled peace process and force the Kremlin to accept a ceasefire as a precondition for negotiations.

"Russia has clearly failed to subjugate Ukraine. The price Russia pays is heavier by the day, and it is paid primarily by the people of Russia," von der Leyen said.

"So the objective of our package couldn't be clearer: we want to maintain the full intensity of our sanctions."

The main element concerns the price cap on Russian oil that the EU, in conjunction with the G7 and Australia, has implemented since December 2022. Last year, the mechanism was made dynamic, with the cap set at 15% below the average price.

However, the disruption triggered by the blockade in the Strait of Hormuz has pushed the price of Russia's Urals oil to $87 per barrel, compared to $58 per barrel in February.

This means that if the EU goes ahead with the planned review on 15 July, the cap will be adjusted upwards, and, as a result, grant Moscow the temporary relief it wants.

The Commission proposes to delay the revision until January 2027 and keep the price cap as it is now: $44.10 per barrel.

The adjustment mechanism "was not made for market shocks like the one caused by the closure of the Strait of Hormuz," von der Leyen said.

The pause until January, she added, "will give oil markets time to stabilise, while preserving pressure on Russia's revenues".