On July 18, 2025, the European Union (“EU”) adopted its 18th Russia Sanctions Package, which aims to further curtail Russian energy revenues and military capacity, as well as strengthen anti-circumvention measures by targeting non-Russian companies and individuals.
The package includes a prohibition on the purchase, import or transfer into the EU of petroleum products obtained in any non-EU country derived from Russia crude oil applicable from January 21, 2026 (except imports from Canada, the U.S., the UK, Norway, and Switzerland, as well as from non-EU countries that are “net exporters” of crude oil). The EU Commission will issue guidance on the implementation of this prohibition, particularly in respect of the evidence relating to the country of origin of the crude oil for the petroleum products imported that importers must provide to comply with this rule.
The UK followed suit on July 21, 2025, by targeting additional entities from Russia’s energy and oil sectors, in particular 135 vessels from its “shadow fleet”, which are responsible for carrying USD 24 billion worth of cargo since 2024. As part of a coordinated effort to drive down the market value of Russian oil, the EU and the UK also decided to lower the cap on Russian oil prices (from USD 60 to USD 47.60 per barrel).
The EU and the UK are increasingly targeting non-Russian companies that facilitate Russia’s evasion of sanctions, in particular companies from China, India, Türkiye, and the United Arab Emirates (“UAE”).
- Measures targeting Russia’s energy sector, including (i) lowering the cap on Russian oil prices, and introducing an automatic and dynamic mechanism to review the oil price cap in the future; (ii) the designation of additional vessels from Russia’s shadow fleet, together with companies and individuals throughout the shadow fleet value chain; (ii) a full transaction ban on Nord Stream 1 and Nord Stream 2 that prevents EU operators from engaging in any transaction regarding the Nord Stream pipelines (including any maintenance, use or operation of the pipelines); and (iii) an import ban on petroleum products derived from Russian crude oil from any non-EU country (except Canada, the U.S., the UK, Norway, and Switzerland, as well as non-EU countries that are “net exporters” of crude oil).
- Measures targeting the financial sector, including (i) upgrading the prohibition on providing specialized financial software to Russian banks into a full transaction ban, and adding additional Russian banks to the entities subject to it; (ii) broadening the transaction ban on third-country financial and credit institutions and crypto-asset providers that frustrate sanctions, support the war against Ukraine, or are connected to Russia’s alternative financial messaging service; and (iii) a new transaction ban on the Russian Direct Investment Fund.
- Measures targeting Russia’s military sector, including (i) the designation of suppliers of the Russian military, and additional Russian and third-country entities providing direct or indirect support to Russia’s military; (ii) expanding the list of entities subject to export restrictions concerning dual-use goods and technologies; and (iii) expanding the list of items that cannot be exported to Russia to cover items for the development and production of Russia’s military systems, chemicals for propellants, and economically critical goods used for construction and transport.
- Additional measures, including (i) the possibility to place a transaction ban on third-country entities that circumvent oil-related sanctions; (ii) measures protecting EU member states from bilateral investment treaty arbitration proceedings launched by Russian entities and individuals; and (iii) a new “catch-all provision” providing EU Member States with additional tools to investigate suspicious shipments that could circumvent sanctions, e.g., to cover the risk of indirect exports to Russia through third countries.
- 135 oil tankers that form part of Russia’s shadow fleet.
- Entities enabling the operation of such vessels, including Intershipping Services LLC, an UAE company with offices in India, Greece, and China, which is responsible for registering shadow fleet vessels under the banner of the Gabonese flag, and Liacco Middle East DMCC, another UAE company, for its ongoing role in moving large volumes of Russian oil on shadow fleet vessels.