The European Union is suspending the automatic adjustment of the oil price cap mechanism until July 15, 2027. Sanctions have also been introduced in the oil refining sphere and against the shadow fleet.
The Council of the EU reported this on Thursday regarding the decision contained in the 21st sanctions package against Russia.
"Concerning energy, today’s package pauses the automatic adjustment of the oil price cap mechanism until 15 July 2027. This is to ensure that Russia's profits from oil sales remain contained, despite the exceptional market situation caused by the closure of the Strait of Hormuz," the report says.
In particular, today's agreement provides for an interim review of the suspension to guarantee that the mechanism remains necessary and proportionate.
In addition, the EU continues to combat the shadow fleet by expanding the scope of existing rules, also extending them to vessels supporting the shadow fleet by providing bunkering and other services, and adding another 41 vessels to the list in addition to the 632 already sanctioned.
"These measures target non-EU tankers that are part of the shadow fleet circumventing the oil price cap mechanism, that support Russia’s energy sector in other ways, or that transport military equipment for Russia or stolen Ukrainian grain. The EU is designating 8 entities and 1 individual active in the shadow fleet ecosystem, including companies operating on behalf of Russia’s oil majors and, for the first time, a crewing agency providing support to the shadow fleet," the message details.
Also, in the oil sector, specifically regarding oil refineries, the EU is adding 18 entities and 1 individual to sanctions, including three oil refineries in Russia, a major Belarusian oil refinery, and a company established to sell Belarusian petroleum products in Russia.
In addition, the package of documents creates the opportunity to ban transactions with listed oil refineries in Russia and third countries that process or refine Russian crude oil and petroleum products. "In this context, the EU is introducing a transaction ban, which will enter into force in six months, regarding the Georgian oil refinery that trades and processes Russian oil in Kulevi. In addition, the EU has added five oil traders to the list of entities subject to the transaction ban for violating the ban on purchasing Russian crude oil and petroleum products," the press release states.
Regarding continued pressure on Russia's critical infrastructure, the Council of the EU added a key cross-border energy supplier and a prominent figure of Russian Railways to the sanctions list, and also extended the transaction ban to two Russian ports and four Russian airports.
"Today’s package introduces a notification obligation for the sales of LNG tankers and a possibility to introduce new restrictions on the sale of LNG tankers to Russian citizens and companies and introduces other contractual obligations to mitigate the risk of reselling to Russia or for use in Russia," the report says.
