BRUSSELS (Realist English). The European Union is considering a temporary freeze of the price cap on Russian oil amid a sharp spike in global prices caused by the blockade of the Strait of Hormuz.
The measure could be part of the 21st sanctions package, which Brussels plans to approve in early June.
A Mechanism that Has Failed
Since 2025, the EU has operated a dynamic mechanism under which the price cap on Urals crude is automatically reviewed every six months and set at 15% below the average market price. The current cap stands at $44.10 per barrel.
Against the backdrop of war in the Middle East and an effective blockade of the strategic Strait of Hormuz, global energy prices have soared. According to Bloomberg, a scheduled July review would automatically raise the threshold to at least $65 per barrel – the highest level since the Cold War.
The problem for Brussels is that such an automatic increase, instead of putting pressure on the Russian economy, would actually ease sanctions pressure. This paradox has forced EU officials to seek ways to intervene in the operation of their own mechanism.
Measures Under Consideration
According to sources familiar with private discussions, the European Commission is considering three main options to prevent an unwanted easing of the sanctions regime:
- Full freeze: Keep the price cap at its current level of $44.10 per barrel, completely blocking the market‑based calculation formula.
- Temporary suspension: Cancel the scheduled semi‑annual increase, citing “exceptional circumstances” in the Middle East, and postpone the review until the end of 2026.
- Ceiling on the increase: Limit any increase to $60 per barrel, matching the original cap agreed with the G7.
Any of these measures is expected to become a key part of the 21st sanctions package against Russia. EU ambassadors were briefed on the plans last week, and Brussels intends to present a formal proposal in early June.
Other Measures in the Package
Besides the oil cap, the upcoming sanctions package includes a number of other restrictions:
- Expansion of personal and financial sanctions: More banks, traders and crypto‑operators helping Moscow circumvent restrictions are to be added to blacklists.
- Strike against the “shadow fleet”: About 20 more tankers will be added to sanctions lists, and the same practice may then be extended to vessels carrying liquefied natural gas (LNG).
- Export controls: Restrictions will target supplies of critical minerals, metals and ores used in Russia’s aerospace industry and drone production.
- Secondary sanctions: Export restrictions will be imposed on about two dozen companies from China, India, Turkey and Central Asia that continue to supply sanctioned goods to Russia.
Context and Reaction
Brussels does not want to repeat past mistakes. The main goal is to prevent the Gulf crisis from unintentionally easing pressure on the Kremlin. At the same time, the EU fears that an overly tough stance could trigger a new round of price hikes and exacerbate fuel shortages.
Adopting sanctions in the EU requires the unanimous approval of all member states. Maritime powers such as Greece often oppose tightening oil pricing rules, while other countries are concerned about their own energy and trade interests.
The European Union finds itself facing a difficult dilemma: freezing the cap would maintain sanctions pressure on Moscow, but technically it could be perceived as a softening of the regime. The final parameters of the 21st sanctions package will be agreed in the coming days, and the effectiveness of the energy blockade on Russia amid the ongoing Middle East crisis will largely depend on this decision.
