By Ivan Timofeev, programme director of the Valdai Membership.
The European Union has unveiled its 18th bundle of sanctions in opposition to Russia, a transfer described by EU overseas coverage chief Kaja Kallas as “one of many strongest packages ever imposed.” That sounds spectacular. However whereas the brand new measures will undoubtedly trigger inconvenience, their actual energy – particularly in 2025 – is extra symbolic than strategic.
Had these similar measures been rolled out in early 2022, the impression may need been extreme. At the moment, financial interdependence between Russia and the EU remained important, and the Russian economic system was nonetheless adjusting to the brand new actuality. However now, three years on, Moscow has tailored. In lots of sectors, it has discovered to function independently. Elevated strain from Brussels not yields proportional injury.
Let’s start with the power sector. One headline measure entails modifications to the worth cap on Russian oil below EU Council Regulation 833/2014. The ceiling has been lowered from $60 per barrel to $47.60. Western European entities are actually banned from buying and selling or transporting Russian oil if the worth exceeds that threshold. In 2022, this might have shaken the market. However in 2025, the truth is totally different: Russian oil is transported through impartial channels, with little reliance on EU carriers or brokers. The result’s extra psychological than sensible.
Russia’s independence in oil logistics has triggered a brand new spherical of assaults on its so-called “shadow fleet.” The 18th bundle expands the checklist of banned vessels below EU jurisdiction to 447 tankers. These ships are restricted from accessing EU ports or providers. Once more, this will likely trigger some logistical friction, but it surely’s removed from a game-changer. Russia can and does transfer oil with out Western European assist. The occasional tanker seizure in contested waters just like the Baltic Sea is unlikely to escalate. In spite of everything, that area is patrolled by Russia’s Baltic Fleet, which, whereas modest in dimension, is greater than able to deterring threats to power safety.
One other measure targets refined petroleum merchandise. The EU now bans imports of oil-based merchandise constructed from Russian crude in third international locations. That is clearly aimed toward stopping international locations like India or Turkey from processing Russian oil and promoting the completed merchandise to Western Europe. However the true loser right here might not be Russia, however the refiners. These third international locations earn important margins from processing. Slicing off that commerce deprives them of revenue and incentivizes inventive workarounds, corresponding to swapping sources of their reserves or manipulating origin knowledge. As all the time, enforcement can be tough.
In the meantime, Brussels has moved to formalize its hostility towards the Nord Stream pipelines. The 18th bundle bans all transactions associated to Nord Stream 1 and a pair of. On condition that each pipelines had been sabotaged in 2022 and stay inactive, that is extra a symbolic gesture than a substantive transfer. The concept of future US-Russia cooperation on restoring the strains can also be useless within the water, thanks to those new restrictions.
The monetary sector hasn’t been not noted both. Extra Russian banks have been faraway from the SWIFT messaging system below Article 5h of Regulation 833/2014, bringing the overall to 55. Transactions with these establishments inside EU jurisdiction are actually prohibited. Once more, this is able to have mattered in 2022. However by 2025, most affected banks are already below EU or US blocking sanctions. In follow, Western companies keep away from them regardless. So this bundle is extra about reinforcing previous strikes than breaking new floor.
Apparently, the EU has begun making use of secondary monetary sanctions, just like Washington’s mannequin. Two small Chinese language regional banks are actually banned from doing enterprise with the EU over ties to Russia’s dual-use provide chains. The inclusion of India’s Nayara Power Restricted – part-owned by Rosneft – is extra notable. This sends a message to firms in Russia-friendly international locations: continued involvement with Moscow’s power sector could come at a worth.
Whether or not that message lands stays to be seen. The US has wielded related threats for years with blended outcomes. Many overseas companies nonetheless see Russia as a priceless market, and their calculations rely on threat versus reward.
Export controls additionally characteristic closely within the new bundle. Twenty-six new entities have been added to Annex IV of Regulation 833/2014, which bans them from supplying dual-use items. Most are small intermediaries, simply changed. The true injury from export bans was performed in 2022 and 2023. There’s little left to dam that hasn’t already been sanctioned. The 18th bundle consists of obscure language about tightening controls on re-exports through third international locations, however how that may work in follow is unclear.
Measure 18 addresses authorized disputes, reaffirming the EU’s refusal to acknowledge arbitration courtroom selections in sanctions-related instances involving Russia. However that is nothing new – it was already a part of the 14th bundle.
On the symbolic entrance, the EU continues so as to add firms and people to its asset freeze checklist below Regulation 269/2014. As anticipated, these embody protection companies and producers, in addition to companies from China and India accused of supplying Russia with industrial items.
Regardless of the daring rhetoric from Brussels, there’s little on this bundle that basically alters the panorama. The sanctions could chip away at sure areas, trigger complications for some companies, and reinforce a hardline stance. However they won’t obtain what the earlier 17 packages have did not do: break the spine of the Russian economic system.
Russia just isn’t what it was in early 2022. It has adjusted its logistics, diversified its markets, strengthened home manufacturing, and recalibrated its monetary flows. The EU’s 18th sanctions bundle just isn’t insignificant, however to name it one of many “hardest ever” is an overstatement rooted extra in political theater than financial actuality.
This text was first revealed in Kommersant, and was translated and edited by the RT staff.
