EU proposes 21st sanctions package against Russia, freezing oil price cap

The European Union has unveiled its 21st sanctions package against Russia, a move aimed at further isolating Moscow and curtailing its ability to finance its war in Ukraine. European Commission President Ursula von der Leyen presented the proposed measures, which include barring Russians who have fought in Ukraine from entering the EU and freezing the mechanism that adjusts the price cap on Russian crude oil.

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Our consistency pays off.

Von der Leyen emphasized that the sanctions are proving effective, stating, "Our consistency pays off." She argued that these measures are isolating Russia from global capital markets, leading to stagnant economic growth, and weakening its military capabilities. The commission believes that maintaining pressure will make it increasingly difficult for the Kremlin to fund the ongoing conflict and justify it domestically.

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The sanctions are in fact isolating Russia from global capital markets, determining stagnant growth and weakening its war effort.

The new package introduces sectoral measures, such as increased scrutiny on fish products. Discussions are also ongoing regarding aluminum oxide, a key component for aluminum production, which has not yet been sanctioned. The price cap mechanism adjustment will be suspended until January of the following year to allow markets to stabilize while maintaining pressure on Russian revenues. The EU aims to compel Russia to negotiate an end to the conflict, not merely to impose sanctions for their own sake.

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It was not designed to cope with market shocks like the one caused by the closure of the Strait of Hormuz.