The European Union is in the final phase of negotiations to adopt a fresh round of sanctions targeting Moscow, with member states working urgently to prevent a politically damaging revision of the Russian oil price cap.
The cap — set at $44.10 per barrel — is automatically revised every six months to stay 15% below the prevailing market price.
The next review is slated for 15 July.
Following the spike in Russian oil after the Strait of Hormuz closure, the adjustment is expected to raise the cap substantially — possibly to around $58 per barrel — giving the Kremlin additional leeway amid a strained economy and Ukraine’s advancing battlefield momentum.
The European Commission deems this outcome unacceptable and has suggested postponing the review until January of next year, maintaining the cap at $44.10 per barrel.
However, Malta, Cyprus, and especially Greece — major maritime service providers — have voiced concerns about such a postponement.
‘The oil price cap was created by the G7 not only to curb Russia’s fossil‑fuel revenues but also to safeguard global energy market stability. This goal is especially pertinent amid the ongoing Middle East crisis,’ a diplomat remarked.
Consequently, any adjustment to the automatic cap mechanism must be carefully calibrated in coordination with our G7 partners.
Compounding the complexity, the oil cap is embedded within a broader sanctions package that Brussels seeks to adopt unanimously.
A Wednesday meeting of ambassadors yielded no conclusive outcome, and another session is scheduled for Friday afternoon. Some diplomats are advocating an emergency Sunday meeting to finalize the package before the 15 July deadline.
‘We’re close,’ said a second diplomat. “I hope we can have a final discussion on Friday.”
From Bacalhau to Kirill
Nevertheless, several critical issues remain unresolved.
Portugal and Germany have voiced strong concerns over a proposed ban on Russian cod and pollack, respectively, given that they are major importers and that such a ban could disproportionately affect their domestic industries.
In Portugal, the issue is especially sensitive because cod — known locally as bacalhau — is a national staple with centuries‑old traditions that support a lucrative ecosystem.
Both countries have engaged with the Commission to devise a phased approach to reduce cod and pollack imports, aiming to mitigate supply‑chain disruption. Germany has identified a viable solution, while Portugal continues to seek one.
A ban on selling LNG tankers to Russia and on permitting Russian LNG transit through EU waters, as well as an ambitious restriction on Russian military personnel entry, are also proving contentious, with France and Italy opposing the latter.
Under the latest compromise, the entry ban has been narrowed to short‑stay visas and to individuals directly involved in Russia’s full‑scale invasion of Ukraine.
Nevertheless, the most formidable obstacle is Bulgaria.
The nation, which recently changed governments, remains staunchly opposed to sanctioning Patriarch Kirill, head of the Russian Orthodox Church, and Vagit Alekperov, a billionaire oligarch tied to Lukoil.
Sofia objects to blacklisting Kirill on religious grounds and to sanctioning Alekperov amid a €3 billion compensation claim lodged by Lukoil against the Bulgarian state. Prime Minister Rumen Radev has publicly drawn a red line.
For now, both names remain on the draft list, though diplomats anticipate they will ultimately be removed to achieve unanimity.
If ambassadors cannot reach consensus on the entire sanctions package, they may split it to advance the price cap — considered the most urgent element — while postponing the most contentious issues for later deliberations.