Six European Union countries — Denmark, Estonia, Finland, Latvia, Lithuania, and Sweden — have proposed that the EU delay the implementation of new changes to the mechanism for capping Russian oil prices and increase sanctions pressure on the Russian Federation. The relevant initiatives are outlined in a joint document submitted for consideration as part of the preparation for the next EU sanctions package.
This is reported by Kyiv24
Concerns about the oil price cap
The mentioned countries emphasize that the proposed dynamic mechanism for adjusting oil prices carries the risk of a significant increase in the price cap due to potential unpredictable fluctuations in the market. The document highlights that such changes could undermine the initial goal of the price cap — to reduce Russia’s revenues from energy resource exports.
“The dynamic mechanism for capping EU oil prices risks leading to a significantly higher level of price restriction than initially intended due to unforeseen market shocks. The EU should postpone the implementation of the oil price cap adjustment and prevent the loss of the very essence of the price cap,” the document states.
Proposals for expanding sanctions
The authors of the initiative urge the EU to impose comprehensive restrictions against key Russian energy companies such as Lukoil, Gazprom, Novatek, and Rosneft, as well as their foreign subsidiaries. According to the six states, this would significantly reduce Russia’s financial inflows and enhance the energy security of EU countries.
It is also noted that the European Union should take measures to terminate all commercial relations with the Russian nuclear industry. Additional sanctions against the so-called “shadow fleet” of Russia are also proposed, including operators, managers, owners, producers, buyers, traders, brokers, intermediaries, as well as port and financial infrastructure.
The document calls for expanding sanctions against Russian banks and financial institutions that are currently not subject to restrictions, including through disconnection from the SWIFT system. It is also proposed to prohibit any participation in transactions with cryptocurrency platforms or services that are established outside the EU and allow circumventing sanctions.
The six countries recommend strengthening trade restrictions to prevent Russia from accessing raw materials that could be used in the military industry. An important part of the proposals is also to enhance the effectiveness of monitoring compliance with existing sanctions, closing loopholes, and strengthening measures to detect and prevent their circumvention.
The document notes a positive assessment of the implementation of the tool to combat sanctions circumvention, introduced in the 20th package, and expresses the expectation that its application will be expanded in the next package.
According to media reports, the European Commission is preparing to present the 21st sanctions package against Russia as early as next week. It was previously reported that the EU may keep the current oil price cap at $44.10 per barrel instead of reviewing it in the summer.