EU Begins Work on New Sanctions Package Against Russia – Estonian Foreign Ministry

This move comes immediately on the heels of the EU’s recently approved 18th sanctions package, one of the most expansive to date, aimed at further crippling Russia’s war economy.

EU Adopts One of Toughest Sanctions Packages Yet

After weeks of negotiations, EU member states agreed on an extensive 18th sanctions package on July 18, 2025 – described by officials as “one of its strongest” so far. This package introduces significant new measures targeting Russia’s energy revenues, maritime trade, and financial sector, while also tightening restrictions on sanction evasion. EU High Representative (and former Estonian PM) Kaja Kallas lauded the agreement, stating, “The EU just approved one of its strongest sanctions packages against Russia to date. We will keep raising the costs, so stopping the aggression becomes the only path forward for Moscow.”

Key measures in the 18th package include:

• Oil Price Cap Lowered: The price cap on Russian crude oil was cut from $60 to $47.60 per barrel – set at 15% below market prices and to be reviewed every six months. “A price cap of $47.60 is not merely technical – it is a political blow to Russia’s war machine,” said Estonia’s Margus Tsahkna, noting that forcing Russia to sell oil below market value will squeeze Putin’s war financing. Britain announced it would join the EU in enforcing the lowered cap, aiming to further dent Moscow’s oil revenues. (Notably, the United States did not endorse lowering the G7 price cap, leaving the EU to move ahead alone.)
• “Shadow Fleet” Vessels Blacklisted: The EU sanctioned 105 additional oil tankers linked to Russia’s so-called “shadow fleet” – tankers used to evade oil export restrictions. This brings the total number of sanctioned vessels to roughly 445–450, meaning these ships are barred from EU ports and services. Targeting the shadow fleet (often uninsured, aging tankers operating covertly) is meant to close loopholes in the oil embargo.
• Ban on Russian Refined Products via Third Countries: A new import ban prohibits buying refined petroleum products made from Russian crude oil even if processed in third countries. This prevents Russia from routing oil through intermediaries (like refineries in other countries) to bypass EU restrictions.
• Nord Stream and Energy Projects: All transactions related to Russia’s Nord Stream 1 and 2 gas pipelines are now banned. This symbolic move underscores that Russia’s halted pipeline projects under the Baltic Sea will remain economically frozen. It also reinforces the EU’s broader shift away from Russian fossil fuels.
• Financial Sector Clampdown: The EU expanded financial sanctions by replacing past measures (like partial SWIFT cut-offs) with a full transaction ban on several Russian banks. An additional 22 Russian banks were added to the sanctions list (bringing the total sanctioned banks to 45), and even two Chinese banks linked to Russia’s SWIFT-alternative system (SPFS) were blacklisted for aiding sanctions evasion. Restrictions on crypto transactions and the Russian Direct Investment Fund were also tightened.
• Export Controls and Trade Bans: The EU broadened its export ban list to deprive Russia’s military-industrial complex of critical technology and materials. New bans cover dozens of dual-use goods and industrial inputs – e.g. certain chemicals (like propellant ingredients), machinery (e.g. discharge and water-jet machine tools), metals (aluminum and specialized steel products), plastics, and advanced electronics. In total, over 180 new tariff codes for goods were added to the restricted list. A new “catch-all” provision empowers authorities to block exports suspected of being rerouted to Russia via third countries, closing transit loopholes.
• Individual and Entity Sanctions: Dozens more individuals and entities were hit with asset freezes and travel bans. These include Russian defense firms, military commanders, and facilitators of aggression, as well as third-country companies aiding Russia’s war effort. For example, the captain and operator of the tanker Jaguar – a ship caught smuggling Russian oil that had to be escorted out of Estonian waters in May – were sanctioned. In total, over 2,500 individuals have now been sanctioned by the EU since the war began. The 18th round also aligned many Belarus sanctions to mirror Russian ones, given Minsk’s role as co-aggressor.

Despite some internal wrangling, the adoption of the 18th package demonstrated EU unity. Agreement had been held up for weeks by objections from a few member states – notably Slovakia and Malta – over specific issues. Slovak Prime Minister Robert Fico threatened a veto unless certain energy concessions were made (Slovakia still relies on Russian gas), but he climbed down on July 17, allowing the package to move forward. Likewise, initial concerns from Greece, Cyprus, and Malta – worried about impacts on their shipping industries – were addressed, and all member states ultimately came on board. “Despite the diversity of opinions and differing dynamics, the EU is united in its shared goal – to support Ukraine by increasing pressure on Russia,” affirmed Latvia’s Foreign Ministry, adding that pressure must keep intensifying with a 19th package now on the agenda.

Nordic and Baltic States: A Driving Force on Sanctions

The EU’s resolve to punish Russia has been spearheaded in large part by its Nordic and Baltic member states, who have consistently advocated for robust sanctions. Countries on Europe’s northern and eastern flank – Estonia, Latvia, Lithuania, Finland, Sweden, and their neighbors – view Russia’s aggression as an existential threat and have pushed the EU to take a hard line.

In the latest round, Estonia played an outsized role. Foreign Minister Margus Tsahkna made it clear that Estonia “would not stop until Russia is held fully accountable” – even threatening to block the 18th package unless the oil price cap was slashed further. This pressure paid off: the cap was indeed cut to $47.6, a level Tsahkna hailed as a moral and strategic victory to choke off Kremlin revenues. “Every euro Russia earns from oil helps fund bloodshed in Ukraine. Our goal is to shut off those financial lifelines,” Tsahkna said, calling it Europe’s obligation to enforce the pain. He emphasized that Russia must eventually “withdraw from Ukraine and compensate for the destruction caused” – a promise that sanctions will persist until those conditions are met.

The Baltic states and their Nordic allies have consistently been the EU’s “hawks” on Russia policy. Lithuania has taken a similarly tough stance: it pushed early for a €45 per barrel oil cap (roughly $50) and has urged closing loopholes like banning Russian gas imports outright. When the 18th package passed, Lithuanian Foreign Minister Kęstutis Budrys declared that the EU’s actions “target the heart of [Russia’s] war economy” and signal that “Russia stays on course of running out of blood money.” In a pointed message to Western partners, Budrys said “The EU paved the way. Now it’s time for [a] perfect storm – the U.S. Senate to…impos[e] crushing burdens on [the] Russian economy and those fueling Russia’s war”, urging America to match Europe’s toughest sanctions. This reflects a broader Baltic view that transatlantic coordination is vital to truly tighten the screws on Moscow.

Latvia likewise welcomed the new EU penalties as proof of unity and immediately called for work on the 19th package to begin. Riga’s representatives noted that even though member states sometimes debate details, “the pressure must continue to be strengthened” until Russian aggression stops.

Among the Nordic countries, Sweden and Finland have also been vocal proponents of ramping up sanctions. Sweden’s government praised the lower oil cap as “a welcome development” that it “long pushed for”. “As Russia continues its brutal war at undiminished strength, it’s all the more important that the EU stays the course. Sweden continues to push for additional sanctions and stronger support to Ukraine,” said Swedish Foreign Minister Maria Malmer Stenergard, reiterating Stockholm’s stance of zero complacency.

Finland’s leaders, newly on the EU’s front line as a Russia-bordering NATO member, have been especially proactive with creative measures. Finnish Foreign Minister Elina Valtonen has proposed imposing tariffs on all remaining Russian imports into the EU – a novel approach to supplement sanctions. Such tariffs, requiring only a majority vote (unlike sanctions which need unanimity), could ensure Russia continues to feel economic pain even if certain embargoes lose effect over time. “If in the future some sanctions lose effectiveness...we’d still have this tariff,” Valtonen argued. She has also championed using frozen Russian assets (about €300 billion under EU/G7 control) to fund Ukraine’s defense and reconstruction, turning Russia’s resources against its war efforts. The Finnish government, alongside the other Nordics, joined a joint statement in late June calling for “increased pressure on the Russian war economy – [through] a major, transatlantically coordinated sanctions package accompanied by tariffs on Russia.” This united Nordic declaration – signed by Sweden, Finland, Denmark, Norway, and Iceland – underlined that continued support for Ukraine must go hand-in-hand with tougher economic punishment of Russia to “bring peace closer.”

It’s worth noting that even Norway and Iceland, while not EU members, closely mirror the EU’s sanctions. Norway, for example, has aligned with EU measures in previous rounds, and all five Nordic countries collectively have committed over $15 billion in military aid to Ukraine in 2025. This regional solidarity amplifies the pressure on Moscow. As Estonia’s Tsahkna put it, democratic nations have a “moral and strategic obligation” to join such efforts.

“No Half-Measures”: Work Begins on a 19th Package

Emboldened by the success of the 18th round, EU officials wasted no time pivoting to the next sanctions package – the 19th since 2022. “Work on the next package is already underway,” confirmed Estonia’s Margus Tsahkna, emphasizing that the Union “will not settle for halfway measures.” Every additional sanctions tranche, he noted, strengthens the message that Russian aggression will not be tolerated or left unpunished. According to Tsahkna, Ukraine is not alone in this fight – the EU intends to keep ratcheting up costs on the Kremlin until Ukraine’s sovereignty is fully restored.

Looking ahead, what might the 19th package entail? Official details are not yet public, but signals from EU leaders and diplomats suggest a continued focus on closing loopholes and targeting any sectors aiding Russia’s war. One area long pushed by Baltic states is Russia’s nuclear sector (Rosatom) – so far un-sanctioned due to resistance from some EU members (notably Hungary, which depends on Rosatom for its nuclear energy). Hawks like Poland and the Baltics argue that Rosatom, which builds nuclear plants abroad and manufactures fuel (including for EU reactors), should face sanctions for its role in the war and occupation of Ukraine’s Zaporizhzhia nuclear plant. Whether the 19th package will finally address the nuclear issue is uncertain; previous attempts were removed to maintain consensus. However, there is growing pressure to at least sanction individual Rosatom executives or subsidiaries as a compromise.

We can also expect further moves against sanctions circumvention. The 18th round set a precedent by blacklisting companies in third countries (including China and Türkiye) that help Russia acquire banned technology or bypass trade restrictions. This marks a new willingness by the EU to sanction non-Russian entities – a trend likely to continue. More shipping companies, banks, or tech firms outside Russia that enable sanctions evasion could be named and shamed in the 19th package, signalling that doing business with Putin’s war machine has consequences even beyond Europe’s borders.

Transatlantic coordination will remain a factor. The United States, under President Donald Trump’s administration in 2025, has sent mixed signals on increasing sanctions. Recently, U.S. officials indicated it was “not yet time for new sanctions” – an apparent effort to prioritize diplomacy and a negotiated ceasefire. In fact, U.S. Secretary of State Marco Rubio stated that Washington personally believed further sanctions should be paused for now. This contrasts with the stance of European nations like the Nordics, who believe more pressure is needed to bring Russia to the negotiating table, not less. The Nordic foreign ministers explicitly called for a “transatlantically coordinated” major sanctions push, implying hope that the U.S. Congress might act even if the White House is hesitant. Indeed, the U.S. Senate has been considering a new Russia sanctions bill, and Lithuania’s foreign minister publicly urged American lawmakers to pass it, calling the moment “time for [a] perfect storm” of combined EU–US economic pressure.

On the upside, Britain has closely mirrored EU sanctions even post-Brexit – as seen with its immediate alignment on lowering the oil price cap. This UK-EU cooperation, alongside potential moves by partners like Canada, Japan, and others, would amplify the effectiveness of any new EU sanctions package. In the words of Latvia’s Ministry of Foreign Affairs, maintaining a united front is critical: while debates will occur, the unity of purpose in the EU and among allies must be preserved in order to “reduce Russian aggression” beyond the EU’s borders.

Economic Impact and Outlook

Each successive round of sanctions is designed to further drain the resources fueling Russia’s war. Early evidence suggests these measures are cumulatively working. Despite high oil and gas revenues in 2022, Russia’s economy is now showing signs of significant strain. “We see that sanctions are working – Russia’s economy is showing some serious cracks,” Finland’s Elina Valtonen observed in February 2025. Moscow has been forced to burn through reserves and hike interest rates to stabilize the ruble; the Russian central bank’s key rate recently jumped to 20–21%, and 2025 growth forecasts have fallen below 1% (down from 3% last year). European officials estimate that EU sanctions alone have already cost Russia about €400 billion in lost revenues – roughly the equivalent of three years of Russia’s pre-war military budget.

To be sure, enforcement remains a challenge. The Kremlin has “adapted to life under sanctions” to some extent, as Vladimir Putin’s spokesman Dmitry Peskov routinely claims. Black-market networks and willing partners (like Iran for drones, or middlemen in China and the Middle East) provide Russia alternate supply lines for certain goods. And not all sanctions bite immediately – cutting oil income, for instance, is an ongoing process as buyers like India and China negotiate steep discounts rather than halt purchases entirely. Some traders doubt the new oil cap alone will massively disrupt Russian exports in the short term.

However, European leaders argue that the cumulative effect is steadily eroding Putin’s war chest. By forcing Russia to sell oil far below global prices, capping its access to finance, and denying critical tech and parts, the EU and its partners aim to degrade Russia’s ability to sustain the war. “Aggression has a price, and it will keep rising,” Tsahkna tweeted when the latest package was adopted. Ukraine’s President Volodymyr Zelenskyy welcomed the EU’s move as “essential and timely,” saying that squeezing Russia’s oil revenues is “critical for putting an end to its aggression.” The message from Brussels is clear: as long as Russian troops occupy Ukrainian land, the economic pressure will continue to mount.

In summary, the European Union – strongly backed by its Nordic and Baltic members – remains steadfast in ratcheting up sanctions on Russia. The quick commencement of a 19th sanctions package shows that Europe has no intention of easing off. Every sanctions round is not just punitive but also signal: that Europe’s support for Ukraine is unwavering, and that Russian aggression will be met with an ever-tighter stranglehold on its economy. While hurdles and differences among the 27 EU countries exist, the ability to find compromise (as seen in the 18th package deal) underscores a resolve to maintain unity in the face of Russia’s war. As the EU looks toward yet another sanctions package, the involvement of its most Russia-wary members ensures that no stone will be left unturned in identifying new ways to impair the Kremlin’s capacity to wage war – be it through innovative tariffs, broader blacklists, or closing remaining loopholes. And with each package, the cost of aggression for Moscow is meant to grow, hastening the day when peace – a “just and sustainable” one, as the Nordic ministers phrased it – can finally be achieved.