European High Representative of the Union for Foreign Affairs Josep Borrell said sweeping new sanctions on Russia would target its ability to fund its war efforts in Ukraine. File Photo by John Thys/EPA-EFE.
Oct. 6 (UPI) -- Sweeping new sanctions imposed on Russia, including a price cap on its crude oil, are proof of Europe's resolve to "stop Putin's war machine," the bloc's foreign policy chief said.
The European Union adopted a new package of sanctions against Russia after it illegally annexed the Donetsk, Luhansk, Zaporizhzhia and Kherson regions of Ukraine. What the bloc referred to as "biting measures" include a price cap on maritime shipments of Russian crude oil to third-party importers.
"This new sanctions package against Russia is proof of our determination to stop Putin's war machine and respond to his latest escalation with fake 'referenda' and illegal annexation of Ukrainian territories," EU foreign policy chief Josep Borell said Wednesday. "The EU will stand by Ukraine for as long as it takes."
Russia draws heavily on revenue from its oil and natural gas exports to fuel its economy. Sweeping sanctions targeting that revenue stream since the war in Ukraine erupted in late February have so far not exacted the heavy toll that was expected.
A late August review from the World Economic Forum pointed to expectations that Russia's economy would contract by 12%, but the Kremlin itself is forecasting about 4% negative growth.
The growing chorus of voices condemning Russia's aggression, particularly its nuclear saber rattling, has nonetheless created problems for the Kremlin, problems that were put on display by way of mounting battlefield victories for the Ukrainian military.
But this week's decision from the Organization of the Petroleum Exporting Countries and their non-member state allies, a group known as OPEC+, to trim their coordinated production allotments by 2 million barrels per day come November could work in Russia's favor should commodity prices spike as a result.
The EU's latest sanction package, however, could limit some of those gains by way of an oil price cap. The EU proposal would allow some Russian oil to flow, but only if purchased at or below a yet-to-be-determined price.
A price cap would be difficult to coordinate, though its passage marks a breakthrough in EU negotiations. Elsewhere, the EU said it was extending a ban on steel products made or sent from Russia as well as a wide-range of other products, from cigarettes to cosmetics.
European Commission President Ursula von der Leyen praised the swift passage of the latest sanctions.
"We are determined to continue making the Kremlin pay," she said.