New oil price cap adds to Russia’s economic distress

Abstract

The newest sanctions package contains measures from all three categories, hitting energy, banking, military industries and individuals. The most significant measures in the package relate to restrictions on Russian energy exports, further specification of the oil price cap and compliance monitoring. With some minor exceptions, maritime imports of Russian crude and petroleum products to the EU have been banned from February 2023. In addition, the imports of Russian crude oil via the Druzhba pipeline were reduced to a small fraction of its earlier flow. The pipeline currently only supplies oil to Slovakian and Hungarian energy companies. In the European Commission’s view, these imports must also cease no later than 2027.