New Delhi: The European Union Friday agreed to sanction Russia-based Rosneft’s largest refinery in India, targeting Russia’s shadow fleet, while reducing the price cap on Russian crude, and also potentially taking aim at refined oil products—which could impact over 16 percent of India’s exports to the continent.
“We’re cutting the Kremlin’s war budget further, going after 105 more shadow fleet ships, their enablers, and limiting Russian banks’ access to funding,” read the statement of Kaja Kallas, the EU’s High Representative for Foreign Affairs and Vice President (HRVP) on X.
The statement added: “For the first time, we’re designating a flag registry and the biggest Rosneft refinery in India. Our sanctions also hit those indoctrinating Ukrainian children. We will keep raising the costs, so stopping the aggression becomes the only path forward for Moscow.”
We are standing firm.
The EU just approved one of its strongest sanctions package against Russia to date.
We’re cutting the Kremlin’s war budget further, going after 105 more shadow fleet ships, their enablers, and limiting Russian banks’ access to funding. (1/3)
— Kaja Kallas (@kajakallas) July 18, 2025
The 18th sanctions package originally proposed to also target the “re-export” of refined oil products based on Russian crude, which the bloc has an issue with, as pointed out EU’s envoy to India Hervé Delphin Thursday.
“In a way, we never prevented anyone from buying oil from Russia. Good for India if it had bought Russian oil at discounted prices because that makes it more affordable for you. That is not the problem. For us, what is the problem is that indeed reducing the capping is about reducing the revenues,” he said, while speaking at Delhi’s Ananta Centre.
Delphin added: “Now the new sanctions package will also address the question of refined oil products. It is true in the context of business there were market opportunities created, whereby India, which has never been historically an exporter of refined products towards Europe, has become one. But it is an artificial situation created by the capping.”
In the 2024-2025 financial year, India exported roughly $16.5 billion worth of petroleum goods to Europe, according to data from the MInistry of Commerce and Industry. The amount is around a quarter less than the previous year, with exports of around $22.5 billion worth of petroleum products to the continent.
However, the export of these products makes up the largest chunk of India’s exports to the Netherlands, a member of the EU, with roughly $13.2 billion worth of goods exported in 2024-2025—roughly 58 percent of total exports to the country—according to data released by the Ministry of Commerce and Industry.
The total exports of petroleum products (HS Code: 27) made up roughly 16.83 percent of India’s total exports to Europe in the last financial year. The EU taking aim at refined oil products based on Russian crude could impact its overall exports to the continent. While India’s overall exports to the EU member-states stood at roughly $75 billion in the last fiscal year, India’s exports of goods to the continent stood roughly at $98 billion with the rest of Europe included.
Meanwhile, India’s imports of Russian crude continued to increase, touching $56 billion in the last financial year (2024-2025), which was 4.8 percent higher than the previous year, when the total stood at roughly $54.23 billion, according to commerce ministry data.
“The oil market by the way has elasticity, and there is a good supply. It is not as if it corners India in a way that it cannot have alternatives. Even with a lower cap, it puts India in a better position to bargain for a cheaper oil price [with Russia]. There are opportunities for India itself, I am not talking about the re-export of refined products, which is an issue for us,” said Delphin.
The EU passed the 18th sanctions package, after hectic parlays with Slovakia, which had held it up the previous two days. The package is linked to the bloc’s planned phasing out of Russian energy by 2027. Without unanimity among member states, the EU cannot enforce new sanctions.
Also read: US likely to move bill imposing 500% tariffs on nations trading with Russia, including India & China
Understanding the G7 price cap
The European envoy was clear that the sanctions imposed by the EU in 2022 were never “designed” to disrupt the global supply of oil, but rather as a means to reduce the amount of “revenues that would be fed” and “channeled” in Russia’s war economy.
Brussels has been looking for ways to apply further economic pressure on Russia as its war with Ukraine has dragged on for over three years. In December 2022, the members of the G7 (US, UK, France, Italy, Germany, Japan, Canada and EU) had announced their intention to introduce price caps on the purchase of Russian crude to $60 per barrel as a means to reduce the overall revenues for Moscow.
“While the EU’s ban on importing Russian seaborne crude oil and petroleum products remains fully in place, the price cap will allow European operators to transport Russian oil to third countries, provided its price remains strictly below the cap,” the EU had said in a statement in December 2022 on the implementation of the G7 price cap.
However, since then the cost for Brent crude oil has steadily decreased, with it trading around $68 a barrel currently, edging closer to the G7 price cap. The EU, originally in June this year, proposed a further reduction of the price cap to $45 a barrel to ensure the sanctions remain effective in curbing Russia’s oil exports. Roughly a third of Russian government revenues continue to be earned from the sale of crude.
In the latest package, the EU has agreed to a floating price cap on Russian crude, ensuring that it remains 15 percent below the market price. According to Reuters, the new price cap, for which third countries, including India, could purchase Russian crude, will be reduced to $47.6 a barrel. The floating price cap would be revisited every three months based on the average prices.
The UK and the EU have been pushing for the new caps, which has found no support from the US under incumbent President Donald J. Trump.
(Edited by Mannat Chugh)