EU envoys try to overcome Greek objections for 21st Russia sanctions package
EU Sanctions, Greek Objections, and Impacts on Russia’s Financial System
By Julia Payne
BRUSSELS, July 22 (Reuters) - EU ambassadors were trying to reach a compromise with Greece on Wednesday to pass a 21st package of sanctions against Russia over its invasion of Ukraine, EU diplomats said.
The new package targets the country's banking sector in an effort to squeeze Moscow's financial system at what the EU sees as a vulnerable time.
However, Greece wants the EU to soften already agreed restrictions on Russian liquefied natural gas (LNG) supplies and has become the main obstacle to adopting the new package.
From January 1, the EU will ban imports of Russian LNG and ban EU companies from providing services to Russian LNG terminals that are majority owned by a Russian entity.
Greek Concerns Over LNG Restrictions
GREECE DOMINATES EUROPE'S LNG CARRIER MARKET
Greek Market Influence and Arguments
Athens argued last week a forthcoming ban on transfer services of Russian LNG to third countries would simply shift market share outside Europe and would not impact Russian revenues. Greece dominates Europe's LNG carrier market and is among the biggest players globally, competing with Japan, China and the United States.
EU diplomats had hoped the departure of Hungary's Viktor Orban, who consistently delayed Ukraine aid and Russia sanctions, would translate to smooth sailing on future packages.
However, new cracks in the bloc's unity have come to the surface as the European Commission tries to close remaining loopholes for Russian business and put further pressure on Russia's vital energy revenues.
Dynagas and Yamal LNG Project
Dynagas, a leading Greek shipping firm active in LNG, operates specialised "ice-class" tankers in its fleet that are designed to service the Yamal LNG project, which is privately owned in Russia's Arctic. It said sanctions would drive business away from Western companies.
Russian company Novatek holds the majority stake in the Yamal LNG project while France's TotalEnergies holds a 20% stake as well as a 19.4% stake in Novatek itself. The EU imported nearly all of Yamal's LNG in the first half of 2026.
"It is not clear that the project is contributing substantially to Russian revenues in the way often portrayed in public debate," Dynagas said in a statement.
"Requiring European operators to abandon long-term contracts will not disrupt trade. On the contrary, it will result in the transfer of strategic Arctic assets (ships) and know-how to non-Western operators."
Sanctions Targeting Russia’s Banking Sector
EUROPEAN REPORT SAYS RUSSIA'S BANKING SYSTEM AT RISK
Scope of Sanctions on Financial Institutions
The new package lists about 215 individuals and entities including 94 financial institutions. Close to 90 of these are banks, which would take the total number of sanctioned banks to over 100, or more than half of Russia's 213 internationally connected lenders.
Russia's major banks were disconnected in 2022 from SWIFT, a secure global financial payment instructions system, under Western sanctions. However, Russian companies have succeeded in maintaining trade and financial flows via small or regional lenders as well as cryptocurrency networks.
Potential Risks to Russia’s Banking System
A European state intelligence service report, seen by Reuters, warned in June that Russia risked an "explosive" banking crisis and a new sanctions package targeting banks could trigger an economic shock. Russian authorities have dismissed warnings of a looming crisis.
EU diplomatic sources said the aim of the listings was to discourage third countries from dealing with these Russian lenders, given any EU ties are now minimal or non-existent.
Oil Price Cap and Further Economic Pressure
Details of the Oil Price Cap
Alongside the listings, the European Commission proposed to freeze the oil price cap at its current level of $44.10 a barrel for six months. The price cap was redesigned last year to track oil price movements and lowered from $60 a barrel.
Temporary Freeze and Negotiations
EU envoys agreed last week to temporarily freeze the cap until July 23 in the hopes of finding a broad agreement. A scheduled review would have increased the price cap on the back of the Iran war and thus provided substantially higher earnings to Moscow.
(Reporting by Julia Payne; Editing by William Maclean and Alison Williams)
