EU Imposes Fresh Russian Sanctions, Sending Oil Prices Higher

The European Union (EU) has imposed fresh sanctions against Russia, targeting its energy, finance, and military industrial base to put pressure on Moscow to end its war in Ukraine.

The 19th package of sanctions puts in place complete transaction ban on Russian energy producers Rosneft Oil Co. and Gazprom Neft. The new measures eliminated the exemption for Rosneft's and Gazprom Neft's oil and gas imports into the EU.

Brussels will implement a total ban on Russian Liquefied Natural Gas (LNG) from January 2027. It clamped down on its "shadow fleet" of 557 tankers, the European Commission (EC) said on Thursday.

The new sanctions have targeted "enablers and profiteers of its war of aggression," the commission said. EC President Ursula von der Leyen said the bloc's sanctions kept "the pressure high on the aggressor" of the war.

"For the first time we are hitting Russia's gas sector — the heart of its war economy," von der Leyen said on Thursday. "We will not relent until the people of Ukraine have a just and lasting peace."

EU Targets Third-Country Operators

The EU also took measures against third-country operators enabling Russia's revenue streams.

These included sanctions against two Chinese refineries and an oil trader. Oil from third countries and the transport of oil compliant with the Oil Price Cap to third countries are exempted.

"The sanctions are fairly strong against two of Russia's major energy companies, and their subsidiaries," Theodore Karasik, a Non-Resident Fellow, Jamestown Foundation, Washington, DC, told European Capital Insights. "The key here is the subsidiaries, and how quickly Moscow and its black market partners can adjust to enforcement measures."

Brent crude gained about 3.1% to $64.54, and WTI surged around 5.6% to $60.43. Both hit two‑week highs, as traders priced in risks of disruptions to Russian oil exports and LNG flows.

Brent looks set to close about 9% higher for the week.

EU, US Align on Russian Sanctions

The EU aligned its policies with the US after Washington announced additional sanctions against Moscow. The Trump administration imposed on Wednesday restrictions on Russian energy majors for the first time.

It cited Moscow's "lack of serious commitment to a peace process to end the war." The US Treasury Department targeted Russia's two largest oil companies, Rosneft and Lukoil OAO, and their subsidiaries..

"US sanctions aim to squeeze Russia's export revenues, which still provide ≈ 35% of its federal budget," Velina Tchakarova, a Geopolitical Strategist, wrote on X on Thursday. "Washington is signaling a total-energy pressure strategy, cutting Russia off from Western capital, insurance, and maritime services next to squeezing a major lifeline for its war economy."

The US wants the Kremlin to accept an immediate ceasefire to end the Ukraine war. President Donald Trump proposed on Tuesday to establish a truce along the current line of fighting. EU leaders have backed the plan.

Trump made the proposal after speaking with Russian President Vladimir V. Putin by phone and meeting Ukrainian President Volodymyr Zelenskyy at the White House. After meeting Zelenskyy on October 17, Trump said, "It is time to stop the killing, and make a deal.”

Zelenskyy failed to convince Trump to supply Tomahawk cruise missiles to Ukraine during the talks.

Russia’s Top Envoy Arrives in Washington for Talks

In the meantime, Russia's top economic envoy arrived in Washington for "official" talks today, CNN reported, citing sources with knowledge of the visit.

Kirill Dmitriev, the head of the Russian sovereign wealth fund and a Kremlin special envoy, will meet Trump officials "to continue discussions about the US-Russia relationship," CNN reported the sources as saying.

Before Dmitriev’s visit, Putin said on Thursday that "no self-respecting country and no self-respecting people ever decide anything under pressure. Russian Foreign Minister Sergei Lavrov has also dismissed appeals for an immediate ceasefire in Ukraine, arguing it would "preserve the Nazi regime."

For the EU, the new round of sanctions aims to hit Moscow where it hurts.

Kaja Kallas, the EU's high representative for foreign affairs and security policy, said on X that the sanctions made it "increasingly harder for Putin to fund this war." She told CNBC that the new US measures against Russia were a "signal of strength."

IMF Downgrades Russian GDP on Sanctions Impact

The Russian Foreign Ministry said on Thursday that the country had developed "immunity" to Western sanctions.

However, Russia's gross domestic product has steadily declined since the first quarter of 2024, according to data from Trading Economics.

The International Monetary Fund downgraded its forecast for Russia's gross domestic product growth in 2025 to 0.6% from 0.9%.

The Russian economy will slow sharply from 4.3% growth in 2024, Reuters reported on October 14.

"So we downgraded growth in Russia for 2025 and 2026, and growth has been significantly slowing since last year," Alfred Kammer, Director, European Department, International Monetary Fund, said on October 17.

"We are forecasting very low growth rates for Russia in the medium-term, reflecting the impact of sanctions and the war."

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