EU adopts 21st Russia sanctions package, freezing oil cap at $44 and granting Greek LNG shipping exception

The 27 EU member states adopted their 21st sanctions package against Russia on 23 July, after weeks of difficult negotiations that laid bare the bloc's internal economic anxieties. The centrepiece is a 12-month suspension of the automatic adjustment of the oil price cap, keeping it at about $44 per barrel instead of letting it rise to roughly $60. A Greek demand for a carve-out on LNG transshipments to non-EU countries was also accepted, drawing criticism for being tailored to a single company.

Oil price cap frozen

The oil price cap, introduced in 2022 with the US, Japan, Canada and the UK, limits the price at which Russian crude can be sold to third countries such as India, China and Turkey. It is enforced by threatening sanctions on shipping, insurance and financing firms that facilitate sales above the cap. Because world market prices have risen sharply due to the Iran war and the near-blockade of the Strait of Hormuz, the cap would have automatically increased to around $60 per barrel. By freezing it at the current level, the EU aims to deny Russia additional revenue. A Commission official estimated the move could cost Russia about €3.5 billion over the year.

Greek LNG exception

Greece blocked the package for more than a week, insisting that European shipowners be allowed to continue carrying Russian liquefied natural gas to destinations outside the EU. The compromise grants a 12-month exception, with a possible automatic extension, for EU-flagged vessels transporting Russian LNG to third countries. The import ban for the EU market itself remains unchanged, with long-term contracts to be phased out by January 2027.

According to analysis by the Centre for Research on Energy and Clean Air (CREA), 96% of the affected third-country transports by European shipping companies in 2025 were handled by Dynagas, the LNG carrier owned by Greek billionaire George Prokopiou.

This is not really an exception for the European shipping industry. It's an exception for one company.

The transport volume may not exceed 2025 levels, and the exception can only be ended by a unanimous vote, giving Greece an effective veto.

National carve-outs and sanctions fatigue

The negotiations revealed a broader pattern of member states protecting domestic interests. Germany sought safeguards for fish finger manufacturers reliant on Russian cod and pollock, Portugal defended its stockfish sector, Bulgaria wanted Patriarch Kirill removed from the sanctions list, Austria shielded Raiffeisen Bank, and France and Italy protected tourism links with Russia. Diplomats noted that without Hungary's former prime minister Viktor Orbán as a convenient blocker, the economic nervousness of other capitals is now fully visible.

Other measures and reactions

Beyond the energy provisions, the package adds 32 Russian banks to the transaction ban list, introduces an entry ban for Russian soldiers, and tightens restrictions on crypto networks, shadow fleet vessels, and the export of goods and technologies used by Russia's military industry.

At a time when Ukraine has gained military momentum, our sanctions continue to weaken the economic foundations of Russia's warfare.

EU Council President António Costa called the package a decisive step to increase pressure on Russia. EU foreign policy chief Kaja Kallas said work on the next steps was already under way.