Without another extension next week, the cap will automatically bounce higher because oil prices have risen due to the war in Iran — handing Russian President Vladimir Putin a windfall. The European Commission is legally obliged to recalculate the price ceiling after July 15 but the new cap would become effective only on Aug. 1, giving the executive some leeway.
It was the third day in a row that EU ministers or ambassadors had met, only to fail to agree on a 21st round of sanctions over Russia’s four-year war of aggression against Ukraine.
The EU is struggling to maintain unity on the penalties even as Ukraine fights back against Russia with a drone campaign that is inflicting heavy casualties and deep strikes that have knocked out several oil refineries. Kyiv’s pushback has led to widespread fuel shortages in Russia and has forced Moscow to scour world markets for diesel to import.
All for one
Because sanctions require unanimity among the EU’s 27 capitals, national governments can put a price on their consent by seeking other concessions. Former Hungarian Prime Minister Viktor Orbán was a notorious blocker of such support for Ukraine, although it was hoped Budapest would prove less obstructive after he was ousted by Péter Magyar earlier this year.
This time, however, Austria and Greece have broken cover to throw a wrench into proceedings.
Vienna has proposed a deal under which Austria’s Raiffeisen Bank would be compensated for what it calls the illegal €2.44 billion expropriation of its Russian operations. The ask would entail seizing and selling €2.1 billion in frozen Russian assets located in Austria; the property ultimately belongs to a company owned by Russian oligarch Oleg Deripaska, a beneficiary of Raiffeisen’s expropriation.