Latest news with #oilpricecap
Yahoo
3 days ago
- Business
- Yahoo
What's in the EU's 18th sanctions package against Russia?
By Kate Abnett and Enes Tunagur BRUSSELS, LONDON (Reuters) -Here are the details of the European Union's 18th package of sanctions against Russia over its war in Ukraine, approved on Friday and aimed at dealing further blows to Russia's oil and energy industry. OIL PRICE CAP Central to the package is a lower price cap on Russian oil - a move designed to shrink Moscow's energy revenues without disrupting global markets by severing Russian supply entirely. The EU will impose a moving price cap on Russian crude at 15% below its average market price, EU diplomats said. That means a cap of roughly $47.60 per barrel at present, well below the $60 maximum that the Group of Seven major economies have tried to impose since December 2022. The new price cap will come into force on September 3 and a 90-day transition period will apply to existing contracts, the EU said in a press release. The measure aims to ban trade in Russian crude bought at a higher price by prohibiting shipping, insurance and reinsurance companies from handling tankers carrying such crude. The European Union and Britain have been pushing the G7 to lower the cap since a fall in oil futures made the $60 cap largely irrelevant. However, the United States has resisted, leaving the EU to move forward on its own, with limited power to enforce the measure because oil is largely traded in dollars, for which payment clearing is controlled by U.S. banks. SHADOW FLEET AND ENERGY TRADE The EU will no longer import any petroleum products made from Russian crude after a transitional period of six months, although the ban will not apply to imports from Norway, Britain, the U.S., Canada and Switzerland, EU diplomats said. The EU sanctions also targeted India's Nayara oil refinery with Russia's largest oil producer Rosneft as its main shareholder. The EU also agreed to end the Czech Republic's exemption from the bloc's existing ban on seaborne Russian crude oil imports, after the country fully switched to non-Russian supplies this year. An additional 105 vessels are banned from accessing EU ports and locks, or undertaking ship-to-ship transfers of oil - an effort to shut down the so-called "shadow fleet" of older oil tankers used to transport Russian oil and circumvent sanctions. The EU also put sanctions on a private operator of an international flag registry, and an entity in the Russian LNG sector, the Council of the EU said in a press release, without naming them. In total, the EU has now imposed sanctions on more than 400 shadow fleet ships. NORD STREAM Transactions related to Russia's Nord Stream gas pipelines under the Baltic Sea will be banned, including any provision of goods or services to these projects. FINANCIAL SECTOR The EU will ban all transactions with Russian financial institutions - already excluded from the global financial messaging system SWIFT. The ban will include transactions with Russia's sovereign wealth fund - the Russian Direct Investment Fund (RDIF) - as well as its investments. This aims to further restrict Russia's access to international financial markets and foreign currency. EU countries also agreed to lower the threshold for imposing further sanctions on foreign financial and credit institutions that undermine the sanctions or support Russia's war effort. EXPORT BANS, NEW BLACKLIST ENTRIES The EU will blacklist 26 new entities for circumventing sanctions, including seven in China, three in Hong Kong and four in Turkey, diplomats said. Certain chemicals, plastics and machinery have been added to the list of goods EU countries cannot export to Russia. DELAYED APPROVAL The package of sanctions on Russia is the EU's 18th since Moscow's full-scale invasion of Ukraine in 2022. Approval was held up for weeks by Slovakia and Malta. Slovakia had demanded guarantees against potential losses from a separate EU plan to ban imports of Russian gas by 2028, and dropped its veto after the EU offered Slovakia some guarantees earlier this week. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
6 days ago
- Business
- Bloomberg
EU Imposes New Sanctions on Russia and Its Oil Trade
The European Union has approved a new package of sanctions on Russia, including restrictions on banking and fuels made from Russian petroleum, and a revised oil price cap – the 18th raft of measures since the country's full scale invasion of Ukraine. The new controls will cut around 20 more Russian banks off from the international payments system SWIFT and blacklist a large oil refinery in India, which is partially owned by Russia's state-run oil company. The deal was initially blocked by Slovakia, until the country last night accepted guarantees from the European Commission that would limit the fallout from a planned cut off of Russian gas.
The Independent
6 days ago
- Business
- The Independent
How the EU aims to put the squeeze on the Russian economy with new sanctions package
The European Union's 18th sanctions package against Russia over its war in Ukraine targets Moscow's energy and financial sectors to limit its ability to fund war in Ukraine. Key measures include a lower oil price cap, Nord Stream transaction ban, more shadow fleet sanctions, and a full ban on Russian bank deals. 'We are striking at the heart of Russia 's war machine,' EU Commission chief Ursula von der Leyen said in a post on X. 'The pressure is on. It will stay on until Putin ends this war.' The measures are intended to ramp up pressure on Russia amid flagging peace negotiations, as well as targeting companies and countries that allow Moscow to evade existing sanctions. They were approved on Friday after weeks of delay caused by repeated Slovakian and Maltese vetoes over natural gas and shipping respectively. Here, The Independent looks at the key measures and their potential impact on the Russian economy. Lower oil price cap The EU will impose a moving price cap on Russian crude at 15 percent below its average market price, EU diplomats said. At present this sets the cap at about $47.60 per barrel, well below the $60 maximum that the G7 have tried to impose since December 2022. A fall in oil futures made the $60 cap largely symbolic. The cap bans trade of Russian crude above the set maximum, prohibiting shipping, insurance and reinsurance companies from handling tankers carrying it. It is designed to limit Moscow's crude revenues, the cornerstone of its war coffers and economy, to make it harder to fund the war without disrupting the global oil market by cutting off supply entirely. The EU has limited powers to enforce the measure due to US resistance. Oil is largely traded in dollars with payment clearing controlled by US banks. So far Russia has been able to sell most of its oil as the current mechanism does not specify who should police its implementation. Since Russia's invasion of Ukraine, Turkey and India have also both continued to import Russian oil and refine it into products which are sent on to the EU. The EU will no longer import any petroleum products made from Russian crude, although the ban will not apply to imports from Norway, Britain, the US, Canada and Switzerland, EU diplomats said. Shadow fleet A further 105 vessels have been banned from accessing EU ports and locks, and undertaking ship-to-ship transfers of oils. The measure aims to shut down the so-called shadow fleet of older oil tankers transporting Russian oil and evading sanctions. The rise of a vast shadow fleet has been helping Moscow maintain its crude exports, keeping revenue flowing. The EU has now sanctioned more than 400 shadow fleet ships. Nord Stream gas pipelines ban Transactions related to Russia's Nord Stream gas pipelines will be banned, including any provisions of goods or services to these projects. A network of natural gas pipelines run under the Baltic Sea from Russia to Germany and were thought to represent Berlin's over-reliance on Moscow for energy. They were disabled after 2022 explosions damaged three of them. But reports in the Financial Times in March suggested that Kremlin-linked Russian and US business people were seeking their reactivation. Financial sector A full ban on all transactions with Russian financial institutions - already excluded from the Swift interbank messaging system - will come into place. The ban extends to transactions with Russia's sovereign wealth fund, the Russian Direct Investment Fund (RDIF), and its investments. The move aims to further restrict Russia's access to international financial markets and foreign currency. The EU also lowered the threshold for slapping sanctions on international financial and credit institutions which circumvent sanctions or support Russia's war effort. For example, by circumventing the oil price cap. 'We are putting more pressure on Russia's military industry, Chinese banks that enables sanctions evasion, and blocking tech exports used in drones,' EU foreign policy chief Kaja Kallas said in a post on X, without providing further details or names. When asked about the sanctions, Kremlin spokesman Dmitry Peskov said Russia has built up a certain 'immunity' to Western sanctions and adapted to them. Peskov called the sanctions illegal, saying every new restriction created negative consequences for those countries that backed them.
Bloomberg
6 days ago
- Business
- Bloomberg
Russia Sanctions: EU Targets Oil & Banks, Stablecoin Bill Boosts Crypto
European Union states have approved a fresh sanctions package on Russia over its war against Ukraine including a revised oil price cap, new banking restrictions, and curbs on fuels made from Russian petroleum. The package, the bloc's 18th since Moscow's full scale invasion, will see about 20 more Russian banks cut off the international payments system SWIFT and face a full transaction ban, as well as restrictions imposed on Russian petroleum refined in third countries. A large oil refinery in India, part-owned by Russia's state-run oil company, Rosneft, was also blacklisted. Today's guests: Eelco Heinen, Dutch Finance Minister, Matheus Dibo, Goldman Sachs Private Wealth Management Investment Strategy Group Managing Director, Marcus Garvey, Macquarie Head of Commodities Strategy, Sanusha Naidu, Institute for Global Dialogue Senior Research Fellow (Source: Bloomberg)
Yahoo
6 days ago
- Business
- Yahoo
The EU targets Russia's energy revenue and shadow fleet with new sanctions over the war on Ukraine
BRUSSELS (AP) — The European Union approved on Friday a new raft of sanctions against Russia over its war on Ukraine, including a lower oil price cap, a ban on transactions with Nord Stream gas pipelines, and the targeting of more shadow fleet ships, EU foreign policy chief Kaja Kallas said. 'The message is clear: Europe will not back down in its support for Ukraine. The EU will keep raising the pressure until Russia ends its war,' Kallas said in a statement. Kallas said the EU move amounts to 'one of its strongest sanctions packages against Russia to date' linked to the war, which is now in its fourth year. It comes as European countries start to buy U.S. weapons for Ukraine to help the country better defend itself. The European Commission, the EU's executive branch, had proposed to lower the oil price cap from $60 to $45, which is lower than the market price to target Russia's vast energy revenues. The EU had hoped to get major international powers in the Group of Seven countries involved in the price cap to broaden the impact, but conflict in the Middle East pushed up oil prices and the Trump administration could not be brought onboard. In 2023, Ukraine's Western allies limited sales of Russian oil to $60 per barrel but the price cap was largely symbolic as most of Moscow's crude — its main moneymaker — cost less than that. Still, the cap was there in case oil prices rose. Oil income is the linchpin of Russia's economy, allowing President Vladimir Putin to pour money into the armed forces without worsening inflation for everyday people and avoiding a currency collapse. The EU has also targeted the Nord Stream pipelines between Russia and Germany to prevent Putin from generating any revenue from them in future, notably by discouraging would-be investors. Russian energy giant Rosneft's refinery in India was hit as well. The pipelines were built to carry Russian natural gas to Germany but are not in operation. They were targeted by sabotage in 2022, but the source of the underwater explosions has remained a major international mystery. On top of that, the new EU sanctions targeted Russia's banking sector, with the aim of limiting the Kremlin's ability to raise funds or carry out financial transactions. Two Chinese banks were added to the list. The EU has slapped several rounds of sanctions on Russia since Putin ordered his troops into Ukraine in February 24, 2022. More than 2,400 officials and 'entities' — often government agencies, banks, companies or organizations — have been hit with asset freezes and travel bans. But each round of sanctions is getting harder to agree, as measures targeting Russia bite the economies of the 27 member nations. Slovakia held up the latest package over concerns about proposals to stop Russian gas supplies, which it relies on. The last raft of EU sanctions, imposed on May 20, targeted almost 200 ships in Russia's sanction-busting shadow fleet of tankers. Friday's measures added more than 100 more ships to the list.
