On Wednesday, European Union ambassadors will hold a meeting in hopes of reaching an agreement with Greece to finalize the 21st round of sanctions against Russia. This marks the first round of sanctions imposed by the EU on Russia since the departure of Hungarian Prime Minister Viktor Orbán from office.
According to reports from Reuters, the new sanctions package will target Russia’s banking sector, aiming to increase economic pressure while its financial system is vulnerable. However, Greece, which advocates for easing restrictions on liquefied natural gas (LNG) supplies from Russia, has become the biggest obstacle to the approval of this plan.
Greek authorities stated last week that the impending ban on the transfer of Russian LNG would only hand over market share to non-European competitors, without affecting Russia’s revenue.
Greece holds a dominant position in the European LNG transportation market, competing with Japan, China, and the United States.
EU diplomats had initially hoped that with the departure of Hungarian Prime Minister Orbán, who had been delaying sanctions against Russia, the new sanctions plan would progress smoothly.
However, as the EU attempts to close loopholes for Russian companies and tighten crucial energy revenue streams for Russia, new divisions within the EU have emerged.
In June of this year, European Commission President von der Leyen announced the 21st round of sanctions against Russia, targeting approximately 215 entities and individuals, including 94 financial institutions, nearly 90 of which are banks. This brings the total sanctioned banks to over 100, accounting for more than half of Russia’s 213 internationally connected lending institutions.
A report from a European intelligence agency warned of the risk of an “explosive” banking crisis in Russia, and the EU’s new round of sanctions could lead to further economic impacts. However, Russian authorities deny that a crisis is “imminent.”
EU diplomatic sources stated that listing these lending institutions for sanctions aims to prevent them from engaging in transactions with third countries, as their ties to the EU have significantly weakened or ceased to exist.
Meanwhile, the European Commission also proposed maintaining the oil price cap at the current level of $44.10 per barrel for a period of six months. The price cap mechanism was revised last year to adjust with oil price fluctuations, lowering it from the previous level of $60 per barrel.
Last week, EU representatives reached a consensus to keep the oil price cap at its current level until July 23 to prevent an increase in Moscow’s revenue due to rising oil prices caused by the situation in the Middle East.