On July 18, 2025, the EU Council approved its 18th sanctions package against Russian individuals and entities, as well as actors from other jurisdictions. One of the most extensive since the start of the war in Ukraine, the package hits the energy and financial sectors and tightens enforcement of existing restrictions.
Energy Sector
Oil Price Cap Cut
Starting September 1, 2025, the EU is lowering the price cap on Russian oil from $60 to $47.60 per barrel. The new cap is set at 15% below the average market price for Urals crude and will be reviewed every six months. A 90-day transition period is granted for contracts signed before the new cap comes into force.
From January 21, 2026, the EU will also ban imports of oil products made from Russian crude, regardless of the country of processing. Exceptions apply to shipments from the UK, US, Canada, Norway, and Japan, with a six-month transition period.
Crackdown on the “Shadow Fleet”
The EU has blacklisted 105 vessels involved in circumventing oil sanctions, bringing the total number of sanctioned ships to 444. For the first time, sanctions also target a ship’s captain and a flag registry operator (Liberian International Ship & Corporate Registry), aiming to disrupt flag-switching schemes used to bypass restrictions.
Nord Stream Pipeline Ban
All transactions linked to the Nord Stream 1 and 2 gas pipelines are now prohibited, including maintenance, operation, and any potential future use. Exceptions are allowed for deals required to prevent threats to health, safety, or the marine environment.
The EU has introduced a licensing regime covering:
- liquidation or restructuring of companies involved with Nord Stream;
- compensation or payments to legal and natural persons;
- enforcement of court or arbitration rulings and settlements;
- services to prevent environmental or infrastructure damage.
Secondary Sanctions on Oil Traders
For the first time, the EU is imposing penalties on non-EU companies trading Russian oil in violation of sanctions. Targeted firms include:
- Trafigura (Singapore) – a major global commodity trader;
- Nord Axis (Hong Kong) – a re-export intermediary reportedly tied to Russian investors;
- Mercantile & Maritime Group (Singapore/UAE) – operator of shadow fleet vessels.
Sanctions extend to these companies’ leadership, subsidiaries, and financial service providers.
Financial Sector
The EU has banned all transactions with 23 Russian banks previously disconnected from SWIFT, including Sberbank, VTB, and Gazprombank. It also prohibits the supply of software to Russian financial institutions, especially those with state ownership.
Another 22 Russian banks were added to the sectoral sanctions list, such as DOM.RF, Ozon Bank,
T-Bank, and Yandex Bank. EU residents are barred from doing business with them or their subsidiaries, including providing messaging services like SWIFT.
The Russian Direct Investment Fund (RDIF), its subsidiaries, and portfolio companies are now fully sanctioned. A transition period runs until December 31, 2026, allowing EU residents to wind down ties with RDIF projects with regulatory approval.
For the first time, financial entities outside the EU were sanctioned for facilitating circumvention, including:
- Bank of Kunlun (China) – known for yuan-based settlements;
- Emirates NBD (UAE) – transactions involving RDIF;
- Binance, Garantex – crypto transactions linked to RDIF;
- UnionPay International – for supporting MIR card operations.
Export Controls
The EU has broadened export restrictions on dual-use goods, including:
- CNC machines;
- gas turbines;
- industrial chemicals.
The new controls affect exports worth over €2.5 billion.
Special focus is placed on transit: eight categories of goods critical to energy, transport, and construction are now banned from passing through Russian territory.
Designations of Individuals and Companies
The EU added 14 individuals and 41 Russian companies to its sanctions list, targeting firms in defense, metallurgy, and energy.
Foreign individuals and businesses were also sanctioned for helping Russia circumvent restrictions. These include entities based in Azerbaijan, Hong Kong, India, China, Mauritius, and the UAE.
Belarus Sanctions
In parallel with Russia-focused measures, the EU tightened restrictions on Belarus. All transactions with Belarusian state banks (Belagroprombank, Bank Dabrabyt, Development Bank of the Republic of Belarus, Belinvestbank.), the Ministry of Finance, and state-owned enterprises (e.g., Belneftekhim, BelAZ) are now banned.
The EU imposed a full arms embargo targeting the indirect supply of military equipment to Russia. This includes:
- chassis deliveries from Minsk Wheel Tractor Plant for Russian missile systems;
- repair of Russian military vehicles at Belarusian plants;
- imports of Belarusian weapons or modernization of Belarusian military hardware inside the EU.
While Belarus can still produce weapons for domestic use, re-exports to Russia, even via third countries, are effectively blocked.
Why This Package Matters
The EU is doubling down on enforcement. As sanctions grow harder to evade, the focus is shifting from announcing new bans to closing loopholes, both within the EU and abroad.
Businesses linked to Russia now face heightened exposure, even indirectly. Russian firms will need to rethink their supply chains, payment routes, and partner structures. Workarounds will persist, but with each new package, they become costlier and riskier.