EU Sanctions Nord Streams 1&2

By Rhod Mackenzie

I will never understand the logic or the thinking of the EU It seems that the EU thinks that if your package of sanctions is a complete failure then just put together another package which is where we are at now after three years and almost 20 packages of sanctions.
The European Commission has announced its 18th package of yet more new sanctions against Russia. These include sanctions on the Nord Stream pipelines for the first time, also they have declared they have lowered the oil price ceiling  for Rusian crude oil to $45 per barrel, plus put a ban on the purchase of diesel fuel made from Russian raw materials. However, Russia will only face a real challenge in one case. Which one is it?
The European Commission has officially presented its proposals for the 18^(th) package of anti-Russian sanctions.
Notably, the EC is proposing sanctions against both Nord Stream 1 and Nord Stream 2 for the first time. According to EC President Ursula von der Leyen, this will mean "a ban on working with them for all European companies" and "there will be no return to the past".

Secondly, she proposed lowering the price cap on Russian oil from $60 to $45 per barrel.
Thirdly, she proposed banning the import of petroleum products based on Russian oil to the EU. Additionally, the EC is proposing to disconnect another 22 Russian banks from the SWIFT system and introduce export bans totalling more than 2.5 billion euros. The head of the EC specified that this would concern mechanical engineering, metals, plastics and chemicals.

'The ban on  Nord Stream is just a PR stunt because these are well-known projects that have been widely discussed in Europe. Sanctions against them demonstrate that the EC continues to fight Russia. If the SMO ends in the near future, we can conclude that they think Russia has been finished off," says Igor Yushkov, an analyst  at the Russian Financial University  and a member the National Energy Security Fund (NESF).
"The ban on the Nord Stream pipeline could also be used as a bargaining chip with the US. When the Europeans impose sanctions on Nord Stream, they are showing the US that they are clearing the market of Russian gas to make way for American LNG. In return, they hope that the US will reduce tariffs on European goods,' according to Yushkov.
In the last three months (March, April and May), the price of Russian Urals oil has been below $60 per barrel, i.e. below the current price ceiling. However, this is not the fault of the West; it is simply a consequence of the market situation. Following the fall in the price of Brent crude oil due to trade wars and increased OPEC+ production, the price of Urals crude oil has also fallen.
Some ship owners, such as Greeks, have returned to transporting Russian oil because its price formally corresponds to the ceiling. Therefore, due to the new competition, transportation services have become cheaper, says Yushkov.

However, the overall situation on the oil market is much more important for Russia: low prices are not good news for exporters or the state, since incomes are falling for both.
Meanwhile, these sanctions could be a problem for Russia if the lowering of the ceiling is part of a larger strategy against it.
'If the lowering of the ceiling and the blacklisting of tankers is preparation for closing the Baltic Sea to our ships, then this would be a serious challenge to Russia,'
But do remember that the Estonians tried to detain an oil tanker bound for Russia with one of its patrol boats and two Polish fighter jets but they went sent home for clean underware when a Russian SU-57 scared them away and I am confident that if the countries of the EU try to harass Russian merchant shipping in the Baltic Sea then the Russian military will respond accordingly  just like they did to the Estonians.
After all Russia now knows that NATO is a paper tiger and when confronted it folds like a cheap suit.
If this is the first step for the EU is to place as many tankers carrying Russian oil as possible on the sanctions list and prohibit them from entering the Baltic Sea. The second step would be to ttry force Russia to comply with the price cap if it wanted to ship oil via the Baltic fleet.
It is impossible to transfer all the oil currently passing through the Leningrad Region and the Baltic Sea to other destinations. So if there were a shortage of tankers would lead to a drop in our oil exports and production," says the FNEB analyst. In such a scenario, adjusting the price cap would pose a significant challenge.But then again Russia has overcome all the challenges put up by the EU so far.
As for the EC's idea to ban Europeans from buying oil products produced from Russian oil in third countries, this would primarily affect European economies. This will inevitably create a fuel deficit within Europe and inflate prices at filling stations, which will immediately be reflected in supermarket  prices.
In 2024, supplies from India, mainly of diesel fuel, increased to 30 million tonnes, five times more than before 2022. The EU also doubled its imports of petroleum products from the UAE.
India itself is unlikely to be affected by such a refusal, as it will easily find other buyers for its Russian oil-derived fuel. This is an extremely profitable business for Indian refineries, enabling them to make competitive prices to buyers.
Europe will have to source oil products from elsewhere, such as the Middle East.
Meanwhile, experts doubt that the 18th package of sanctions will ultimately be approved by all 27 EU countries.
'The new price ceiling is unlikely to be approved by the EU Council, the body that will consider the European Commission's (EC) proposals for the new package of sanctions. For the new ceiling to come into force, all 27 EU countries must give their consent, including Hungary and Slovakia, who traditionally delay the most unpopular proposals of the European Commission," says Sergey Tereshkin, CEO of Open Oil Market. In addition, the price ceiling must be agreed upon with the 'G7', who initially adopted it.
So the 18th package of sanctions is to quote William Shakespeare 'Much Ado About Nothing.