EU’s 18th sanctions package: key impacts for trade, energy and shipping

Posted: 22/07/2025

On 18 July 2025, the European Union adopted its 18th package of sanctions against Russia, representing one of the EU’s most comprehensive sanctions packages since the outset of the war in Ukraine. It represents a sharp escalation in legal, reputational and compliance risks for the shipping, trade and energy sectors.

This package targets Russia’s energy revenues, its military industrial complex and its financial sector, while also tightening enforcement and anti-circumvention mechanisms.

Key regulations

The new measures are legally implemented through two key regulations:

1. Council Implementing Regulation (EU) 2025/1476 – amends Regulation (EU) No 269/2014, which governs individual asset freezes and travel bans.
2. Council Regulation (EU) 2025/1494 – amends Regulation (EU) No 833/2014, which sets out sectoral economic sanctions, including those on energy, finance, and trade.

New asset freezes and listings

Under Regulation (EU) 2025/1476, the EU has added 14 individuals and 41 entities to its asset freeze list. These include:

• companies and individuals involved in Russia’s shadow fleet, which is a network of tankers used to circumvent oil sanctions;
• Nayara Energy Limited, a privately operated Indian refinery with significant Russian ownership, which has been directly sanctioned by the EU due to its ongoing role in processing and distributing Russian crude; and
• a vessel captain and a flag registry operator, marking the first time such operational roles have been specifically targeted.

These listings come with no wind-down period meaning that the restrictions take effect immediately.

Energy sector measures (Regulation (EU) 2025/1494)

The EU continues to focus on cutting off Russia’s energy revenues, which remain a major source of funding for its war efforts. Key measures include:

• lowering the oil price cap for Russian crude from USD 60 to USD 47.6 per barrel, with a new automatic and dynamic adjustment mechanism to keep the cap 15 per cent below the average market price for Urals crude over the previous six months;
• an import ban on refined oil products made from Russian crude, even if processed in third countries;
• port access bans and service restrictions on an additional 105 vessels. This brings the total number of listed ships in the shadow fleet to 444; and
• full sanctions on several companies managing these vessels, traders of Russian crude, and Nayara Energy, a key customer of the shadow fleet.

These measures are expected to increase operational, regulatory and compliance risks across the maritime oil supply chain.

Financial sector crackdown

The EU has escalated financial restrictions by:

• expanding the list of Russian banks subject to sanctions;
• converting prior SWIFT messaging bans into comprehensive transaction bans for designated institutions; and
• targeting 22 additional Russian banks, effectively cutting them off from the EU financial system.

Military industrial and dual use goods

The EU is tightening controls on dual-use goods and technologies that could support Russia’s military activities.

• 26 new companies, including entities in China and Belarus, have been added to the list of organisations subject to export restrictions.
• The scope of restricted goods now includes high precision tools, advanced electronics, and chemical substances with potential dual use applications.

Nord stream pipelines and related measures

• A full transaction ban has been imposed on Nord Stream 1 and 2, prohibiting any EU entities from engaging in any transactions or services related to these pipelines.
• The EU is also increasing pressure on flag states to prevent shadow fleet tankers from sailing under their registries.

Immediate actions for shipping companies

The 18th package significantly raises compliance, reputational and legal risks in the shipping sector. Immediate actions for shipping companies to undertake are as follows.

Sanctions screening:

• update internal databases and compliance tools to reflect the expanded vessel blacklist and newly sanctioned entities; and
• review insurance, port access and service contracts to ensure there is no involvement with sanctioned vessels.

Voyage and chartering practices:

• reassess cargo routes, vessel fixtures and third party intermediaries involved in oil and petroleum transport; and
• avoid engaging in trade where origin, refinery source or beneficial ownership is unclear or unverifiable.

Contractual safeguards:

• strengthen charterparty clauses to require counterparties to warrant compliance with EU sanctions; and 
• consider including right to terminate and indemnity provisions in case of breach.

Risk and operational management:

• conduct enhanced due diligence on any vessel showing patterns of Automatic Identification System spoofing or ship to ship transfers; and
• monitor freight rate volatility and potential congestion as routes are adjusted to accommodate the new compliance constraints.

Implications for other businesses

For all companies with EU, Russian or third country exposure, this package brings:

• immediate compliance obligations for newly listed entities and vessels;
• increased due diligence across trade, finance and maritime operations; and
• heightened scrutiny of beneficial ownership, vessel behaviour, and sanctions evasion practices.

Conclusion

The 18th sanctions package reflects a coordinated effort by the EU to restrict Russia’s access to global markets, reduce its war revenues and hold it accountable for its continued aggression in Ukraine. It also signals a decisive shift towards stricter enforcement and stronger controls to prevent circumvention.

Businesses operating in shipping, energy, finance or any sector with Russian exposure should act without delay. Reviewing sanctions screening systems, contractual safeguards and third party relationships is essential to minimise exposure and mitigate legal and commercial risk. A proactive and well documented compliance approach will be critical as enforcement actions increase and due diligence expectations rise across the EU and globally.

This article was co-written by Laura Stigaite, trainee solicitor in the marine, trade and aviation team.

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