The European Union has agreed on its 21st package of sanctions against Russia, ending weeks of fraught negotiations that nearly derailed the entire effort. The deal, reached by EU ambassadors on Thursday, includes a significant concession to Greece, which had threatened a veto over restrictions on Russian liquefied natural gas (LNG).
Under the agreement, Athens secured a derogation allowing Greek shipping companies to transfer Russian LNG to non-EU clients for contracts signed before Russia’s full-scale invasion of Ukraine in February 2022. This exemption, which will be reviewed annually, effectively postpones the full impact of a ban that was originally set to take effect in January 2027. The move was driven by Dynagas, a Greek shipping firm owned by billionaire George Prokopiou, which operates 11 vessels—including seven Arctic-ready icebreakers—chartered to Russia’s Yamal LNG facility.
The Greek government argued that blocking these shipments would harm Europe’s maritime services industry, destroy jobs, and empower competitors outside the bloc, without significantly weakening Moscow’s war chest. Other member states were reportedly taken aback by Athens’ sudden demand to revisit a measure that had already been adopted as EU law, fearing it would set a dangerous precedent. Yet Greece held firm, and the majority ultimately relented, granting the exemption in a move that raises questions about the influence of national economic interests on the bloc’s sanctions policy.
Oil Price Cap Frozen, Shadow Fleet Targeted
Beyond the LNG dispute, the package freezes the price cap on Russian oil at $44 per barrel for the next 12 months. This avoids a politically awkward revision that would have raised the cap to $58 per barrel under a formula linked to global market shifts—a scenario Brussels deemed unacceptable as it would have provided the Kremlin with financial relief at a time when Ukrainian forces are gaining momentum on the battlefield. European Commission President Ursula von der Leyen welcomed the freeze, stating on Thursday morning: “Freezing the oil price cap adjustment for a year, so that the Russian war machine does not benefit from market shocks.”
The sanctions also blacklist 30 vessels from Russia’s so-called shadow fleet, which Moscow has used to circumvent the oil price cap and, in some cases, conduct hybrid warfare operations. More than 600 such decrepit ships have now been denied access to EU ports and services. Additionally, the package targets Russian banks, crypto and oil-trading platforms, various metals used on the battlefield, and over 250 individuals and companies accused of supporting the invasion, spreading pro-war propaganda, or enabling sanctions evasion.
This latest round comes amid broader transatlantic tensions over enforcement, as detailed in our analysis of the EU’s concurrent fine on Google and the 21st sanctions package.
Watered-Down Measures and National Vetoes
The final text is considerably weaker than initially proposed. An attempt to restrict imports of Russian fisheries—particularly cod and pollack—was abandoned after Portugal and Germany voiced reservations. Bulgaria succeeded in removing two names from the blacklist: Patriarch Kirill, head of the Russian Orthodox Church, and Vagit Alekperov, the billionaire founder of Lukoil. A bold proposal to ban Russian soldiers from entering the Schengen Area was downgraded to a non-binding commitment to continue working on implementation, after France and Italy raised concerns about administrative burdens and legal responsibility for consular services.
Austria, meanwhile, secured a political victory by persuading member states to consider lifting sanctions on Rasperia, a blacklisted investment company. This move is intended to offset a €2.1 billion loss incurred by Raiffeisen Bank International in Russia, highlighting the ongoing tension between EU sanctions policy and the financial interests of member states.
The Greek veto was not the only obstacle. As we reported earlier, Greece’s blockade over the LNG ban had threatened to unravel the entire package, and the eventual compromise underscores the difficulty of maintaining unity among 27 member states with divergent economic priorities.
While the EU has managed to avoid a politically disastrous revision of the oil price cap, the concessions granted to Greece, Austria, and others raise serious questions about the long-term effectiveness of the sanctions campaign. As the war in Ukraine enters its fourth year, the bloc’s ability to sustain pressure on Moscow may increasingly depend on navigating the competing interests of its own members.
