Eighteenth EU Sanctions Package: One of the Strongest?

The European Union has introduced its 18^th package of sanctions against Russia. EU High Representative for Foreign Affairs and Security Policy Kaja Kallas has called it “one of the strongest sanctions packages against Russia to date.” It is hard to call the new measures painless, but their destructive power is clearly exaggerated. If they had been introduced in 2022, when the level of economic interdependence between Russia and the EU was much higher and experience dealing with them much lower, their effect could have been very serious indeed. But we live in the realities of 2025, when increased efforts do not result in proportional damage.

The new EU sanctions cannot be ignored. It is necessary to carefully monitor the impact of a number of new measures on business and their operations with foreign countries. However, this applies to any new package of sanctions. It seems redundant to consider the 18^th package “one of the strongest”. 

The European Union has introduced its 18^th package of sanctions against Russia. EU High Representative for Foreign Affairs and Security Policy Kaja Kallas has called it “one of the strongest sanctions packages against Russia to date.” It is hard to call the new measures painless, but their destructive power is clearly exaggerated. If they had been introduced in 2022, when the level of economic interdependence between Russia and the EU was much higher and experience dealing with them much lower, their effect could have been very serious indeed. But we live in the realities of 2025, when increased efforts do not result in proportional damage.

In terms of the degree of danger to the Russian economy, we should start with the energy sector. The latest amendments to EU Council Regulation 833/2014 tighten the so-called price cap on Russian oil. Under the new rules, EU persons and entities under EU jurisdiction are barred from trading or transporting Russian crude if its purchase price exceeds the capped limit—previously set at $60 per barrel but now reduced to $47.60.

First introduced in December 2022, the price cap has now been adjusted with an added mechanism to align it with fluctuating oil prices. While the US and other sanctioning parties also implemented the measure, Washington has yet to follow the EU in lowering the threshold. In practice, the new measure would have been extremely painful amid the realities of early 2022. At that time, the role of carriers and intermediaries from the EU was significantly higher. However, in 2025, Russia transports oil on its own and does not need intermediaries from the EU.

The only really noticeable result may be the informational and psychological effect.

Buyers in friendly countries get a trump card in negotiating discounts. But with proper skill, which Russian companies have, such a trump card is beatable.

Ivan Timofeev:
EU Sanctions: Signal Package

Moscow’s independence in oil transportation gives rise to another measure of the 18^th package – the fight against the “shadow tanker fleet”. This is a ban on access to ports and other operations for oil tankers and other vessels named in the annex of Regulation 833/2014. The measure was applied throughout 2025 and the 18^th package brings the number of such vessels to 447. Restrictions complicate oil transportation, including due to the narrowing of opportunities for bunkering or replenishment in EU ports. But they cannot be called critical. Deliveries are quite possible without any EU involvement. There have been attempts to delay tankers loaded with Russian oil. But in the Baltic Sea and the Gulf of Finland, which are the most convenient for such delays, the Russian Baltic Fleet is present. Compared to other fleets of the Russian Navy, the Baltic Fleet is relatively small. But its forces are still sufficient to prevent economic sanctions from turning into forceful actions against oil tankers in the Baltic Sea region.

Another measure is a ban on the purchase of oil products from third countries produced from Russian oil. This measure, at first glance, corresponds to the realities of 2025. It is obvious that part of the Russian oil supplied to friendly countries is used by them for refining and then exported to the EU. But there are nuances. Third countries get the margin from refining. And Brussels’ new ban is a blow to them, as it deprives them of their margins. In theory, it may indirectly affect Russia by reducing demand for its oil. But in practice, third countries can manoeuvre their reserves, using oil from other countries for refining and replacing it with Russian crude. Not to mention the possible difficulties of controlling the real origin of oil products.

The proverbial fight against windmills in the form of restrictions against the Nord Stream-1 and Nord Stream-2 gas pipelines continues: any transactions related to them, including the purchase of gas transported through them, are prohibited. In practice, such supplies were undermined by pipeline sabotage in September 2022. The 18^th package merely reinforces the status quo in the form of sanctions. One could assume that this measure stops possible cooperation between Russia and the US to restore the pipelines. The EU sanctions make it meaningless, as the purchase of gas from these pipelines is now prohibited. But Russian-American cooperation on the Nord Streams has not been officially discussed and remains less than obvious.

In the financial sector, high-profile measures have also been taken. The number of Russian banks subject to bans on financial messaging services (simplified as “disconnection from SWIFT”) under Article 5h of Regulation 833/20214 has been expanded. The measure has been applied before. Now there are 55 such banks. The restrictions themselves are also expanding. Along with “disconnection from SWIFT”, any transactions with banks under EU jurisdiction or EU persons are prohibited. In 2022, the measure would have been quite resonant, especially since the first ten banks fell under such sanctions in March and June 2022. But such restrictions make little difference in 2025. Some banks have previously fallen under EU blocking sanctions and others are under US blocking sanctions. Given the experience of huge US Treasury Department fines, EU businesses often shy away from dealing with those affected by US blocking sanctions.

Therefore, the escalation of the 18th Package with regard to the financial sector does not radically affect the situation.

Ivan Timofeev:
Three Years of Stress Test: Interim Results for Russia

The EU continues to fight the Russian Financial Messaging System (SPFS), slightly expanding the conditions for third-country banks to be sanctioned for using it. But here the fear of third countries is more likely to be caused by similar threats from the US. In addition, the EU has begun to impose secondary financial sanctions on banks that are associated with the supply of dual-use goods to Russia: transactions with two Chinese financial institutions have been banned. However, these are small regional banks, not large institutions. They are unlikely to be affected by being cut off from the EU market and its financial system, but business in transactions with Russia may bring them profit.

Export controls are being expanded; 26 persons, including foreign ones, are listed in Annex IV of Regulation 833/2014. These persons are prohibited from supplying dual-use goods and there are no exceptions for such supplies. But such goods have already been under broad prohibitions since 2022. Expanding the list to include companies from third countries is unlikely to do much—they are often small intermediary firms that can easily be replaced by others. The same applies to the expansion of the list of banned goods. The most serious bans were introduced two or three years ago. It is difficult to add something radically new to them. The 18^th package creates a legal mechanism for tightening control over the re-export of prohibited goods through third countries. But it does not imply direct bans. Member states can use it at their discretion, and the practice of its application is still unclear.

The measure of the 18^th package on the non-recognition of arbitration court rulings of foreign countries with regard to disputes related to sanctions against Russia is not new. Active measures were applied here as early as last year, including within the framework of the 14^th package of sanctions.

As for the new blocking financial sanctions under Regulation 269/2014, they are mostly routine. In addition to military-industrial complex companies and industrial companies, it is customary to impose restrictions on companies from China and India engaged in the supply of industrial goods to Russia. The blocking sanctions against India’s Nayara Energy Limited can be considered notable. According to the EU authorities, the company is 49 percent owned by the Russian oil company Rosneft. Nayara Energy Limited was sanctioned due to its involvement in the Russian energy sector. Probably, according to Brussels’ plan, such sanctions should send a signal to businesses in countries friendly to Russia that ties with the Russian energy sector are fraught with secondary sanctions. Practice will show how exactly such a signal will be perceived. But the US already has legal mechanisms and experience in applying such sanctions, which has not yet led to fundamental changes for Russia.

In sum, the new EU sanctions cannot be ignored. It is necessary to carefully monitor the impact of a number of new measures on business and their operations with foreign countries. However, this applies to any new package of sanctions. It seems redundant to consider the 18^th package “one of the strongest”. 

First published in the Valdai Discussion Club.