EU targets foreign refiners, Russian energy companies with new sanctions proposal

EC proposes sanctions on Rosneft, Gazpromneft

Foreign refineries, traders, petchems companies targeted 118 new shadow tankers listed under 19th package

The EU has proposed further clampdowns on Russia’s foreign oil buyers, major energy companies and dozens of new shadow tankers in its 19th sanctions package, officials announced Sept. 19.

In a televised address, European Commission President Ursula von der Leyen said that new measures will target refineries, oil traders and petrochemicals companies purchasing Russian oil abroad in breach of existing EU policy.

Third-country target will include China, raising pressure on the Kremlin’s second-largest oil buyer.

The proposed sanctions include a full transaction ban on Russian energy giants Rosneft and Gazprom Neft, along with an asset freeze on other companies supporting Russia’s war economy. These companies were already facing partial restrictions, and Gazprom Neft was further targeted by US sanctions in January.

Additionally, the EC has pushed to clamp down on enforcement of its newly adjusted oil price cap, which was adjusted lower on Sept. 3 for the first time since 2022.

The EU also targets enforcement of its oil price cap, identifying 118 new “shadow tankers” that breached the cap and adding them to a blacklist of 442 vessels. Additionally, the sanctions package proposes banning the re-insurance of these vessels to ensure better enforcement.

The sanctions package will now be submitted to EU member states for final approval, which requires unanimous agreement among the 27 countries.

Third-country focus

Tougher measures from the EU follow a push from the US to target Russia's largest oil buyers, China and India, with secondary sanctions, and reflect a growing willingness to shut in Russian supply.

After Russia's full-scale invasion of Ukraine in February 2022, EU sanctions had deliberately left the door open for Russia to ship its oil to countries outside the bloc, fearing price spikes if exports were suspended entirely.

However, recent policy decisions have reflected a growing willingness to target international trade flows, with an incoming EU import ban on refined products made from Russian oil in 2026.

EU President Ursula von der Leyen stated that Russia’s oil revenues in Europe have dropped by 90%, and the EU is now committed to permanently reducing these revenues. The EU's 19th sanctions package reflects its readiness to target third countries doing business with Russia, as seen in previous sanctions against entities in India, Turkey, and China.

Russia's oil exports, which make up a third of its government revenue, have been a primary target for sanctions. Despite these measures, persistent Ukrainian drone strikes and high military spending have caused delays in refinery upgrades and reduced fuel production capacity. However, successive sanctions have failed to erode the value of Russia's Urals crude, reached its narrowest discount to Dated Brent since the war began.