Key takeaways
EU and UK lower crude oil thresholds
New limits aim to reduce Russia’s energy revenues with differing wind-down periods and enforcement timelines.
Banks, software, and investment funds face new bans
EU and UK measures now block transactions with dozens of Russian banks and prohibit tech support to Russian entities.
Port bans and export controls intensify pressure
New bans deepen pressure on Russia’s industrial and financial sectors, limiting access to key resources.
Sanctions update: EU 18th Package of Sanctions and UK companion sanctions against Russia
The key developments from the EU 18th Package of Sanctions against Russia and the UK’s companion sanctions are summarised below.
EU
On 18 July 2025, the EU Council adopted the 18th EU Russia Sanctions Package. These are economic and individual measures aimed at Russia’s energy, military and banking sectors, as well as trade with the EU. They have five key objectives:
Cutting Russia’s energy revenues.
Hitting Russia’s banking sector.
Further weakening Russia’s military-industrial complex.
Strengthening anti-circumvention measures.
Holding Russia accountable for its crimes against Ukrainian children and cultural heritage.
The Council listed a further four individuals and 41 entities considered to be responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, bringing the total number of EU individual listings to over 2,500.
Among the key measures are the following:
Energy/price cap
EU
The EU has lowered the price cap for Russian origin crude oil, effective from 3 September 2025, from US$60 per barrel to US$47.60 per barrel, to align the price with prevailing global oil prices.
There is a transition period to 18 October 2025 for relevant contracts with an effective date before 20 July 2025 and which were compliant with the existing price cap of US$60 at that effective date.
Subject to any future clarification by way of FAQ, such contracts concluded after 20 July 2025 will need to be completed by 2 September 2025 if there is any EU nexus to the commercial arrangements to allow performance of the same.
The price cap for Russian origin crude oil will be reviewed by the European Commission on 15 January 2026, and then every six months thereafter, though it will not be amended for fluctuations in the market price of less than 5% over the reference period.
UK
The UK has also lowered the price cap for Russian origin crude oil, from US$60 per barrel to US$47.60 per barrel. However, the UK’s lowered price cap of US$47.60 per barrel comes into effect at 23:01 (BST) on 2 September 2025.
Additionally, for any trades with an effective date of contract before 2 September 2025, and which are compliant with the existing price cap of US$60 per barrel, there will be a wind-down period of 45 days, ending at 23:01 (BST), Friday, 17 October 2025.
Energy /price cap difference – EU and UK
There is therefore a difference between the EU and the UK:
The EU restricts the wind-down to 18 October 2025 to price cap compliant contracts for Russian origin crude concluded up to 20 July 2025 only.
The UK allows price cap compliant contracts for Russian origin crude oil to be concluded up to 2 September 2025 to take advantage of a wind-down to 18 October 2025 before the new price cap of US$47.60 applies.
Accordingly, should there be any EU nexus to commercial arrangements for the purchase of Russian origin crude oil for contracts concluded for US$60 per barrel after 20 July and before 2 September 2025, then it would appear prudent to consider 2 September 2025 and not 18 October 2025 as the last day for performance of those contracts.
The EU and UK’s price cap partners, the G7 (including the U.S.), Australia and Norway are yet to follow the EU and UK in reducing the price cap on Russian origin crude oil to US$47.60 per barrel, potentially marking further divergence between the different sanctions’ regimes.
Russian origin petroleum products
The price caps of US$100 on high-value refined oil products, such as diesel, and US$45 on low-value refined oil products, such as fuel oil, remain unaffected.
However, from 21 January 2026, EU operators will not be allowed to buy, import, or bring petroleum products into the EU if they were made in another country using Russian crude oil. Technical or financial assistance for such petroleum products will also be prohibited.
The European Commission has said it will provide guidance on how to follow this rule, including what documentation operators will need to show when importing refined petroleum products to evidence that they are not of Russian origin.
The 18th package has also brought in a list of partner countries1. The partner countries that have already banned Russian oil and petroleum products are not affected by this rule. Also, if a country exports more crude oil than it imports in a year, its petroleum products will be treated as made from its own oil — not from Russian oil. Again, the European Commission has said that details will be provided in their future guidance.
The package also provides the possibility to ban EU operators from transactions with third country entities that circumvent restrictions.
EU port access bans and designations
Further sanctions across the shadow fleet chain mean that an additional 105 vessels are subject to an EU-wide port access ban and a ban on the provision of a range of maritime transport services. The number of vessels listed by the EU in Russia’s “shadow fleet” is now 444 as the EU aims to target tankers being used to circumvent the oil price cap mechanism.
The 18th Package also includes a range of asset freezes, travel bans and bans on providing resources that target Russian and international companies managing shadow fleet vessels, as well as traders of Russian crude oil. In addition, a refinery in India with Rosneft as its main shareholder, was also targeted.
Trade
There is a full transaction ban on the Nord Stream 1 and 2 pipelines, including for the provision of goods and services.
There is an expansion of export restrictions and bans aimed at Russia’s military-industrial complex; specifically, restrictions on additional advanced technologies and further export bans that correspond to almost Euros 2.1 billion of exports.
The EU’s consolidated FAQs on the implementation of Regulations 833/2015 and 269/2014 were also updated on 23 July 2025. The EU clarified that while it is prima facie prohibited to import into the EU, purchase, transfer of primary, unwrought aluminium with CN code 7601 to third countries, its import into the EU is subject to quota.
Anti-circumvention measures
26 entities are added to the list of those providing direct or indirect support to Russia’s military-industrial complex or engaging in sanctions circumvention. These comprise 15 Russian-based entities and 11 in third (non-EU) countries.
The transit ban is expanded by adding additional goods used for construction and transport. These goods can no longer transit Russian territory when exported from the EU to third countries.
There is also a new catch-all provision to address the risk of circumvention via third countries of exports of advanced technology items. This is designed to help Member States stop and investigate suspicious shipments and prevent the circumvention of sanctions.
Financial sector
A partial ban (on providing specialised financial messaging services) on EU firms doing business with 23 listed Russian banks has now become a total ban on any transactions, and another 22 Russian banks have been added to the list.
There is also a widening of the transaction ban for third country financial operators who help circumvent sanctions, support the war against Ukraine or are connected to Russia’s financial messaging service. EU operators are banned from carrying out any business with the listed operators.
Additionally, there is a ban on providing banking software to the Russian Government and Russian companies.
A ban has also been imposed on carrying out any transactions with the Russian Direct Investment Fund (RDIF) and its sub-funds and companies.
Military
Sanctions have been imposed on suppliers of the Russian military industrial complex, including three Chinese entities. The aim is to further restrict Russia’s access to goods and technologies.
26 new entities will be subject to tighter export restrictions concerning dual-use goods and technologies, including those that could contribute to the technological enhancement of Russia’s defence and security sector. Eleven of these entities are located in third countries other than Russia.
The EU has also agreed further export bans worth more than Euros 2.5 billion that relate to items contributing to the technological advancement of Russia’s defence and security sector.
UK
On 21 July 2025, the UK announced 137 sanctions targeting Russia’s critical oil and energy sectors. These new sanctions are aimed at cracking down on Russian shadow fleet operations in targeting 135 oil tankers that form part of the fleet that is said to be responsible for illicitly carrying over US$24 billion worth of cargo since the beginning of 2024.
These measures follow on from the addition, in June 2025, of 10 new entities and 20 specific vessels on the UK sanctions list. Those designations targeted individuals and entities considered to be involved in supporting the Russian energy and financial sectors, as well as vessels involved in the transportation of Russian oil.
On 18 July 2025, the UK joined the EU in lowering the price cap on Russian origin crude oil as detailed above.
Comment
The Russian sanctions programs are increasingly complex and pose real challenges in shipping and other businesses keeping abreast of the ever-changing legal, reputational and practical implications of sanctions. It appears that stringent compliance measures remain key.
1 Canada, Norway, United Kingdom and United States of America and Switzerland
