EU mulls tougher sanctions on Russia, eyes Nord Stream ban
The European Union is preparing a new package of sanctions targeting Russia to increase pressure on Moscow to end its war against Ukraine. The plan includes cutting off more than 20 banks from the international SWIFT payment system, lowering the price cap on Russian oil, and banning the use of Nord Stream pipelines.
According to Bloomberg, the European Commission is holding talks with member states about the new package of sanctions against Russia. The proposed restrictions aim to further limit Moscow's revenues and hinder access to technology needed for weapons production. According to individuals familiar with the matter, who spoke on condition of anonymity, a decision regarding the timing for implementing potential restrictions has not yet been made. It is important to remember that EU sanctions require the support of all member states and may change before they are formally proposed and adopted.
In addition to cutting off more than 20 banks from the SWIFT system, the Union is considering imposing additional transaction bans on about 24 banks and new trade restrictions valued at approximately $2.6 billion. As part of the discussed package, the bloc's executive body also plans to propose lowering the Group of Seven's price cap on oil to about $45 per barrel.
Germany's support for sanctions on Nord Stream
The EU's plan to impose sanctions on the Nord Stream pipelines already has Germany's support. Chancellor Friedrich Merz, who stated in Rome last week that he supports the Commission's proposal to "begin work on European measures against the Nord Stream 2 pipelines," hopes that sanctions could ease domestic debates about resuming these projects.
Rumors of a potential revival of the pipeline project intensified when President Trump pressed for peace between Russia and Ukraine. Even without a formal ban, the launch of Nord Stream 2—which was built but never certified by Germany and was partially damaged by explosions in 2022—was unlikely in the near future. Sanctions would reinforce Europe's stance that it does not want any significant return of Russian gas flows. The ban would also protect Berlin from dealing with potential pressure from the US or Russia on its own.
Separately, the bloc plans to phase out Russian fossil fuels by the end of 2027. The EU is also considering expanding its sanctions on Russia's "shadow fleet" of oil tankers and contemplating further restrictions for lenders seen as supporting Moscow's war efforts, as well as the Russian Direct Investment Fund.
International implications of new sanctions
Lowering the price cap on Russian oil would likely require support from the United States. The price threshold, which prohibits G7 service providers from transporting and trading oil sold above the cap, is currently set at $60. G7 finance ministers failed to reach an agreement on lowering the cap at a meeting in Banff, Canada, this week.
These discussions come as U.S. President Donald Trump has called on Moscow and Kyiv to hold direct talks on a ceasefire and peace agreement. So far, Trump has avoided imposing new sanctions on Russia, despite multiple threats to do so. Sanctions imposed during President Joe Biden's tenure remain in force.
The bloc also wants to include clauses in its next sanctions package—which would be the EU's 18th package since Russia's full-scale invasion of Ukraine in 2022—to protect European companies from arbitration based on bilateral investment treaties. Such actions aim to safeguard the European Union's economic interests amid rising tensions with Russia.
