Sanctions on energy

Targeting Russian oil revenues

The EU has prohibited the import of seaborne crude oil and refined petroleum products from Russia. The impact of the oil ban on Russia is significant. Around half of its total oil exports go to the EU. In 2021, the EU imported €71 billion worth of oil: crude oil (€48 billion) and refined oil products (€23 billion) from Russia. Losing this leading lucrative market has a significant structural effect on Russia, whose budget relies substantially on these oil revenues. 

Price caps, agreed with the G7+Price Cap Coalition, have further reduced the revenues Russia earns from oil and also helped stabilise global energy markets. The price caps prevent EU operators, for example, from providing transport or insurance services for the transport of Russian oil above the cap. Three price caps are currently in place, on the export of:

• Russian seaborne crude oil, fixed at a maximum price of US$47.6 per barrel, following the 18th sanctions package
• “premium-to-crude” petroleum products, such as diesel, kerosene and gasoline, fixed at US$100 per barrel
• “discount-to-crude” petroleum products, such as fuel oil and naphtha, US$45 per barrel

The 18th sanctions package also introduced an automatic and dynamic mechanism for future reviews of the Oil Price Cap. The new system will ensure that the cap is always 15% lower than the average market price for Urals crude in the previous period of six months, resulting in both predictability for operators and downward pressure on Russian energy revenues.

In addition, to help tackle the ‘shadow fleet’ used by Russia to circumvent the price caps, the G7+ Price Cap Coalition has recently introduced measures to closely monitor the sale of tankers to third countries 

Other energy measures

• an import ban on all forms of Russian coal
• an import ban on liquified petroleum gas (LPG), impacting annual imports worth over €1 billion, with an exemption for existing contracts for a maximum period of 12 months
• an import ban on a variant of LPG that is used to bypass existing restrictions
• an import ban on Russian liquified natural gas (LNG) as of 1 January 2027 for long-term contracts, and within six months as of the entry into force of the sanctions for short-term contracts
• a ban on future investments in, and exports to, LNG projects under construction in Russia
• a ban on the use of EU ports for the transshipment of Russian LNG
• a ban on the import of Russian LNG into specific terminals which are not connected to the EU gas pipeline network
• a ban on the provision of goods, technology and services for Russian LNG and crude oil projects
• a ban on new EU investments in the Russian mining sector, with the exception of certain raw materials
• a ban on exports of specific refining technologies, making it harder and more costly for Russia to upgrade its oil refineries
• a far-reaching ban on new investment across the Russian energy sector, with limited exceptions for civil nuclear energy and the transport of certain energy products back to the EU
• prohibiting Russian nationals or entities from booking gas storage capacity in the EU Member States
• end the possibility to import Russian oil by pipeline for Germany and Poland
• a ban on temporary storage or placement of Russian crude oil or petroleum products in EU ports
• a ban on the export, supply or provision of oil and gas exploration software to Russia
• a transaction ban for Nord Stream 1 and 2 pipelines
• a transaction ban on major oil and gas companies Rosneft and Gazprom Neft
• an import ban on refined oil products derived from Russian crude
• measures targeting third country operators that enable its revenue streams by buying Russian gas or enabling its shadow fleet