The EU has introduced its 18th package of sanctions against Russia, further intensifying pressure on key sectors of the Russian economy. These measures come in response to Russia’s continued war in Ukraine and aim to disrupt its economic resilience, oil revenues, defense capabilities and international sanctions evasion networks. Below is a summary of the key measures.
Table 1: Overview of Sanctions in the EU’s 18th Package
| Sanction | Description |
| Oil Price Cap Adjustment | The EU reduced the price cap on Russian crude oil from $60 to $47.6 per barrel, setting it at 15% below the global market average. The cap applies to EU shipping and insurance companies involved in transporting Russian oil to third countries. |
| Nord Stream Ban | A full transaction ban was imposed on Nord Stream 1 and 2 pipelines, preventing any maintenance, operation or future use. |
| Shadow Fleet Restrictions | An additional 105 vessels were added to the EU sanctions list, bringing the total to 444. These ships face port bans and maritime service restrictions. For the first time, a shadow fleet captain and a flag registry operator were sanctioned. |
| Refined Petroleum Ban | Imports into the EU of petroleum products refined from Russian crude in third countries (e.g., India, Türkiye) are now banned. Exceptions apply to Canada, Norway, Switzerland, the UK and the United States. |
| Financial Sector Sanctions | Full transaction bans were placed on 22 Russian banks and the Russian Direct Investment Fund, including its subsidiaries. Sanctions also target Chinese banks and other third-country entities facilitating sanctions evasion. |
| Export Restrictions and Anti-Circumvention | New bans were placed on dual-use technologies, advanced items and military-related chemicals. 91 entities and 14 individuals, including in China, Hong Kong, Türkiye and India, were sanctioned for aiding Russia’s war effort or circumventing sanctions. |
The reduction of the oil price cap from $60 to $47.6 per barrel could significantly affect Russia’s financial ability to sustain its war efforts, especially given that the oil and gas sector represents about one-third of Russia’s government budget. To put this into perspective, Russia’s oil and gas revenues fell to 750 billion rubles in 2025, down from 1,750 billion rubles in 2022 (see Figure 1 below). This substantial decline illustrates the effectiveness of previous sanctions. However, while the new cap may deepen this trend, it is unlikely to cripple Russia’s war machine entirely. Russia has successfully redirected oil exports to other markets, particularly India and China. As a result, the true effectiveness of the oil price cap depends on international enforcement beyond the EU.
Figure 1: Russian Oil and Gas Revenues
The full transaction ban on Nord Stream 1 and 2 pipelines appears largely symbolic. These pipelines have been offline since 2022. The ban eliminates any prospects for their future reactivation, but its practical impact on Russia’s current operations is minimal. Its real value lies in signaling the EU’s commitment to cutting off all potential future dependencies on Russian energy infrastructure.
The addition of 105 ships to the sanctions list, targeting Russia’s shadow fleet, brings the total number of restricted vessels to more than 444. This move aims to disrupt Russia’s ability to move oil discreetly and bypass international sanctions. Sanctioning a captain and a flag registry operator is a notable escalation and a first for the EU. However, this remains only a partial blow. Russia’s shadow fleet is estimated to include approximately 1,400 vessels, the majority of which remain unaffected. Furthermore, enforcing such restrictions outside of EU waters poses considerable challenges, limiting the broader impact of this measure.
The new ban on refined petroleum products addresses a major loophole. Countries like India and Türkiye have been importing Russian crude oil, refining it, and exporting the resulting products to the EU. This allowed Russian oil to enter the European market through indirect channels. The new measure effectively closes this backdoor, although exceptions granted to countries such as Canada, Norway, Switzerland, the UK and the United States may dilute its reach. As with other measures, enforcement, particularly in tracking the origin of refined petroleum, will be key to its effectiveness.
The package also reinforces export restrictions. The EU has expanded its list of banned items to include dual-use technologies, advanced technical components and chemicals critical to Russia’s military-industrial production. Still, Russia has shown adaptability. Since the appointment of Andrey Belousov, an economist and technocrat, as minister of defense, there has been a shift in approach. Belousov has emphasized the concept of “technological sovereignty” and has prioritized domestic production in the defense sector. While full substitution of imported components is not feasible, the role of countries like China, Iran and North Korea in supplying technology has been critical for maintaining Russia’s war capabilities.
Looking ahead, a potentially more impactful development lies in the upcoming US secondary sanctions, expected to take effect in September or sooner, as reports suggest. President Donald Trump has given Russia an ultimatum to approach peace negotiations more seriously. The contents of the US sanctions are still unclear, but they are expected to be severe. If implemented with broad international cooperation and enforcement mechanisms, these measures may prove far more damaging to Russia’s war economy than the EU’s latest package. In summary, the 18th EU sanctions package reflects a strategic escalation targeting oil revenues, logistics and supply chains while closing key loopholes. It moves beyond symbolic gestures and toward enforcement and deterrence. However, the overall impact of the package remains constrained by the challenges of global enforcement and Russia’s increasing reliance on alternative trade and financial networks. As such, the EU’s measures may not be decisive in isolation. It is the combination of multilateral pressure, especially through anticipated US sanctions, that may ultimately define the effectiveness of the Western economic response to Russia’s ongoing war.
