EU Considers Major Sanctions Against Russia, Targeting Over 20 Banks and Energy Pipelines

The European Union is deliberating a significant sanctions package aimed at intensifying pressure on Russia to cease its ongoing conflict with Ukraine. Key components under consideration include the removal of more than 20 Russian banks from SWIFT, the international payment system, a reduction in the price cap on Russian oil, and a ban on the Nord Stream gas pipelines.

According to sources familiar with the discussions, the European Commission is currently consulting member states regarding these proposals. However, a definitive timeline for implementing these measures remains unclear, as EU sanctions necessitate unanimous approval from all member states. This means that the details could evolve before any formal proposal is put forth.

In addition to the banking restrictions, the EU is contemplating transaction bans on around two dozen banks and approximately €2.5 billion ($2.84 billion) in new trade restrictions. These measures are designed to diminish Russia’s revenue streams and its access to technology essential for weapon production.

A notable aspect of the proposed sanctions package is the potential reduction of the Group of Seven (G7) oil price cap to around $45. This cap currently stands at $60 and prohibits G7 service providers from handling crude oil sold above this threshold. Importantly, any adjustment to the cap would likely require support from the United States, which recently struggled to reach a consensus on this issue among finance ministers during a meeting in Banff, Canada.

These discussions unfold against a backdrop of contrasting diplomatic initiatives, as U.S. President Donald Trump has called for direct negotiations between Moscow and Kyiv to achieve a ceasefire. Despite his rhetoric, Trump has refrained from imposing new sanctions, while existing sanctions under President Joe Biden remain intact.

Crucially, the EU’s move to sanction the Nord Stream pipelines has garnered backing from Germany. German Chancellor Friedrich Merz expressed support for the Commission’s proposal, emphasizing the hope that sanctions could quell domestic debates regarding the potential revival of the pipeline projects. The Nord Stream 2 pipeline, although constructed, has not been certified by Germany and suffered damage from explosions in 2022.

Such sanctions would reinforce Europe’s stance against any significant reintroduction of Russian gas supplies, shielding Berlin from any external pressures from the U.S. or Russia. Moreover, the EU has announced plans to phase out Russian fossil fuels by the end of 2027.

In addition to these measures, the EU aims to expand sanctions targeting Russia’s shadow fleet of oil tankers and impose further restrictions on financial institutions allegedly supporting Moscow’s military efforts.

The bloc is also considering new clauses in its upcoming sanctions package—its 18th since Russia’s Special Military Operation in Ukraine in 2022—to protect European businesses from arbitration under bilateral investment treaties.