**EU Takes Aim at Russian Oil and Energy Industry**
The European Union has agreed to impose its 18th package of sanctions against Russia, targeting the country’s oil and energy industry. The new measures aim to lower the price cap for buying Russian crude oil to $47.6 per barrel, a significant drop from the previous cap.
**Sanctions Package: A Strong Blow**
According to EU foreign policy chief Kaja Kallas, the package represents “one of the strongest sanctions packages against Russia to date.” The sanctions also include a ban on transactions related to Russia’s Nord Stream gas pipelines and target 105 ships in Russia’s “shadow fleet,” which Moscow uses to circumvent oil sanctions. Additionally, the package aims to stop Chinese banks from enabling sanctions evasion.
**Concerns Over Enforcement**
However, analysts and oil traders have expressed concerns over the effectiveness of the new sanctions, citing a lack of real power to enforce them. The EU has no means to block trades by denying access to dollar clearing, which is crucial for global oil transactions. Furthermore, Russia has managed to sell most of its oil above the previous price cap, making it unclear who will police the implementation of the new measure.
**G7 Price Cap: A Missed Mark**
The G7’s price cap on buying Russian crude oil has been ineffective so far, with traders doubting that the new EU sanctions will significantly disrupt Russian oil trade. The current mechanism makes it unclear who must enforce its implementation, and Russia has continued to find ways to circumvent the previous price caps.
**Ukraine Welcomes Sanctions**
The Ukrainian President Volodymyr Zelenskiy and Foreign Minister Andrii Sybiha have welcomed the EU’s decision, calling it “essential and timely” as Russia intensifies its air war on Ukrainian cities and villages. Depriving Russia of its oil revenues is critical for putting an end to its aggression, according to Ukraine.
**A Watershed Moment?**
The new sanctions package represents a significant escalation in the West’s efforts to curb Russia’s energy industry. However, it remains to be seen whether this will be enough to disrupt Russian oil trade and ultimately affect Moscow’s behavior in Ukraine. As the situation continues to unfold, one thing is clear: the stakes are high, and the consequences of failure could be severe.
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