European Union envoys agreed on a 21st sanctions package against Russia over its war in Ukraine on Thursday, imposing curbs on the banking sector while granting Greece a controversial one-year exemption allowing EU companies to transfer Russian liquefied natural gas to third countries. The compromise underscores the ongoing tension between maintaining European unity and ensuring sanctions actually reduce Moscow's war revenues.
The package designates 94 Russian financial institutions, mainly banks, alongside Moscow's stock exchange. Once adopted, these entities will fall under the full weight of sanctions which include asset freezes, travel and transaction bans. The restrictions target the banking sector in an effort to squeeze Russia's financial system at what the EU sees as a vulnerable time for its economy.
The Greek Compromise
Athens secured the exemption after arguing that a forthcoming ban on transfer services of Russian LNG to third countries would simply shift market share outside Europe and would not impact Russian revenues. The measure was due to come into effect on January 1. EU imports of Russian LNG will still be banned from that date.
"Member states showed solidarity with Greece and it's expected that Greece will do the same with others in the future," one EU diplomat said.
Greece dominates Europe's LNG carrier market and is among the biggest players globally, competing with Japan, China and the United States. The one-year exemption comes with an automatic renewal provision, raising questions about whether the EU is prioritizing national economic interests over the effectiveness of its sanctions regime. Sanctions require unanimity to be adopted.
Oil Price Cap Frozen
The package includes a 12-month freeze on the Russian oil price cap at $44.10 a barrel. A scheduled review would have increased the price cap on the back of the Iran war, providing substantially higher earnings to Moscow.
"We're...freezing the oil price cap adjustment for a year, so that the Russian war machine does not benefit from market shocks," European Commission President Ursula von der Leyen wrote on X.
The decision reflects a recognition that global instability shouldn't translate into windfall profits for the Kremlin. But it also highlights the EU's limited ability to control global energy markets — the cap only works if major importers like India and China respect it, and enforcement remains patchy.
Shadow Fleet and Crypto Targeted
In addition, the package targets vessels helping Russia's shadow fleet for the first time and bans transactions with more crypto platforms and oil trading companies. The technical work on the sanctions package will now be concluded and a written procedure for adoption will be launched on Thursday afternoon.
The shadow fleet designation is significant. Russia has assembled a fleet of aging tankers, often with opaque ownership structures and inadequate insurance, to move oil beyond the reach of Western sanctions. These vessels pose environmental risks and allow Moscow to evade price caps. The EU's willingness to name and sanction specific ships marks an escalation in enforcement — but the fleet numbers in the hundreds, and new vessels can be added faster than the EU can sanction them.
Why This Matters:
The 21st sanctions package shows the EU's continued commitment to supporting Ukraine and isolating Russia economically. But the Greek LNG exemption exposes the fragility of European unity when national economic interests collide with collective security goals. If sanctions are to work, they must reduce Russian revenues — not simply redirect them through third countries or exempt key sectors to preserve market share for European firms. The freeze on the oil price cap prevents Moscow from benefiting from global shocks, but it also reveals the limits of Western leverage in a multipolar energy market. As the war grinds on, the EU faces a choice: tighten sanctions enforcement and accept the economic cost, or watch its measures erode through exemptions and workarounds. The effectiveness of European solidarity will be measured not in the number of packages adopted, but in the revenues denied to Russia's war machine.