Day 1249

On 25 July, the biggest news comes from Europe.

New sanctions from the United Kingdom and the European Union are tightening the noose around Russia’s shadow fleet, the covert network of tankers that has long helped Moscow dodge oil export restrictions. This time, enforcement is not only more coordinated but also more surgical, and the effects are beginning to show across the broader infrastructure of Russia’s war economy.

Most recently, the United Kingdom unveiled its latest sanctions package, which directly targets dozens of tankers suspected of transporting Russian oil in violation of the G7 price cap, operating under flags of convenience and obscure ownership structures to avoid detection. London has now imposed asset freezes on over 100 shadow fleet vessels and sanctioned several front companies that provide critical insurance, financing, and logistical support, embedded in global maritime hubs. Beyond targeting individual vessels, the UK’s restrictions also prohibit any UK-based companies from interacting with ships or firms linked to sanctioned oil trade, thereby closing off access to a broad range of legal and financial services that have long sustained the shadow fleet.

In parallel, the European Union has adopted its 18^th sanctions package, with new measures aimed at undermining the legal and logistical foundations of shadow fleet operations. The package introduces enhanced penalties for any port offering services to re-flagged or disguised Russian tankers, creates a public blacklist of vessels involved in price cap violations, and extends sanctions to intermediaries that provide false documentation regarding the origin of cargo. Perhaps most importantly, the European Union now authorizes penalties against third-party countries, companies, and organizations that facilitate Russian circumvention efforts.

This move places significant pressure on states such as Türkiye and the United Arab Emirates, which have quietly hosted the fleet’s support infrastructure. Taken together, the actions of the United Kingdom and the European Union amount to the most comprehensive assault yet on Russia’s oil export system.

The effects of this crackdown are already being felt in the water. Earlier this year, a Russian-affiliated tanker docked in Belgium, and was only later identified as part of the shadow fleet, triggering internal reviews across European ports and prompting the introduction of stricter inspection protocols. Since that incident, insurance firms have come under increased scrutiny, maritime monitoring has intensified, and cooperation between European customs and naval forces has expanded. This makes it significantly harder for Russian tankers using falsified or re-flagged registrations to access European ports or services, forcing the fleet into riskier, longer, and more expensive trade routes.

These constraints are showing the effect of a deeper financial crisis. Russia is no longer able to rely on stable dollar-denominated transactions and has instead turned to trading with strategic partners, paying Iran 104 million dollars in gold for Shahed drones and offering weapons and industrial components to North Korea in exchange for artillery shells and frontline soldiers. As covered in a previous report, the Kremlin has also resorted to using cryptocurrency and shell companies based outside of Russia to hide the nature of arms deals and payment transfers. These improvisations may help Moscow stay afloat in the short term, but they reflect how their economic system is losing access to hard currency and struggling to sustain even the most basic elements of war finance.

The geographic consequences are just as significant. With the Baltic Sea under increasing surveillance and the Black Sea heavily contested, Russia has shifted some of its shadow fleet activity to Arctic ports such as Murmansk; however, these are a last resort, as they remain ice-free for only seven to eight months of the year. Yet even these fallback routes are becoming less viable, as the United Kingdom and Norway have increased maritime patrols in the Barents and North Seas, regions where they maintain logistical and geographic naval advantages. The result is a tightening noose around the shadow fleet: as evasion options shrink and enforcement improves, Russia’s ability to maintain oil flows and convert the revenues into weapons faces a steadily rising cost curve.

Overall, the clampdown on Russia’s shadow fleet marks a shift from symbolic pressure to systematic disruption. As enforcement expands from financial tools to maritime routes themselves, Moscow faces a narrowing horizon, where every export, workaround, and transaction becomes harder to hide, more expensive to maintain, and less capable of sustaining the war.

A Ukrainian drone strike has hit a Lukoil oil depot near Sochi International Airport, killing two civilians and injuring 11 others, including a traffic police officer. The explosion sparked a massive fire and forced the airport to suspend operations, triggering widespread flight delays and chaos across regional hubs.

This marks one of the most severe drone attacks inside Russia this year, underscoring the expanding reach of Ukrainian drone warfare and the growing risks to energy and transportation hubs far from the front lines.

The targeted facility, Lukoil-Yugnefteprodukt, is located on Tavricheskaya Street in the Sirius settlement of Krasnodar Krai. The governor of the region, Veniamin Kondratyev, confirmed the casualties and urged locals to avoid the area due to ongoing emergency response efforts.

Flights delayed, passengers stranded

Nearly 800 passengers bound for Sochi are now stranded in Novosibirsk, Omsk, and Tomsk, according to Russia’s West Siberian Transport Prosecutor’s Office. More than 60 flights were delayed as authorities raced to contain the situation and assess damage to critical infrastructure.

Ukraine hits Sochi — a drone strike blows up a Lukoil oil depot and grounds flights at Russia’s top Black Sea resort.

Oil depot in flames
Flights canceled
Attack deep inside Russian territory

Video: Astra pic.twitter.com/YcznbXQwjV

— Euromaidan Press (@EuromaidanPress) July 24, 2025

Railway and fuel infrastructure also damaged

Ukrainian sources, including the Telegram channel Exilenova+, reported that drones also struck a railway bridge and additional oil facilities near Adler and Sochi Airport. Eyewitness videos from Sochi and Abkhazia captured massive explosions and thick black smoke rising from the scene.

Strategic strike amid escalation

Russia’s Ministry of Defense said seven drones were intercepted overnight in Krasnodar Krai, but confirmed that debris from one UAV struck Sochi, causing the fatalities and fire.

Russian state oil and gas revenue is set to fall in July by around 37% from the same month in 2024 to 680 billion roubles ($8.66 billion) due to cheaper oil and a stronger local currency, Reuters reported on 22 July.

The oil and gas revenues significantly fund Russia’s war effort, and a reduction narrows Moscow’s ability to sustain its military campaign. This drop has mainly been caused by Western sanctions, persistent price caps, discounting of Russian oil, lower global oil prices, and declining gas exports amid the Russian full-scale invasion of Ukraine.

The decline marks a significant drop in proceeds from what has been “the most important source of cash for the Kremlin, making up a quarter of total federal budget proceeds,” according to Reuters analysis.

Despite the annual decline, the proceeds are “set to increase by 37% from June due to cyclical payments of oil profit-based tax,” Reuters calculations indicate.

According to Reuters, the average Russian oil price calculated in roubles has remained below the federal budget’s target for 2025 throughout the period analyzed.

The broader impact extends beyond July, with Russia’s oil and gas revenue for January-July potentially declining “by 20% year-on-year to 5.4 trillion roubles,” Reuters calculations show.

The finance ministry will publish its official estimates on 5 August, according to the report.

Budget projections have undergone substantial revisions this year. The ministry had initially planned to earn 10.94 trillion roubles from oil and gas sales this year, but due to falling oil prices, it revised that expectation down to 8.32 trillion roubles.

This represents a sharp contrast to 2024 performance, when “oil and gas revenue reached 11.13 trillion roubles last year,” according to the data.

Rosneft-linked oil payment rules changed after EU sanctions, Bloomberg reports. Mumbai-based Nayara Energy, the Indian refinery part-owned by Rosneft, now demands upfront payment or documentary letters of credit from buyers, showing how far-reaching the latest EU sanctions package is.

Nayara tightens oil deal terms after new EU measures

Nayara Energy Ltd., a key Indian refinery partially owned by Russia’s Rosneft, is now requiring advance payments or documentary letters of credit for upcoming oil shipments. According to Bloomberg, the shift was revealed in a revised tender document for a naphtha cargo scheduled for next month. The previous version of the tender included no such financial requirements. Naphtha is a fraction of crude oil, used for further petrochemical production.

Kpler analyst Zameer Yusof told Bloomberg the move “underscores how far-reaching the latest tranche of EU sanctions are.” He said the advance payment condition likely reflects fears that buyers may back out of deals or that banks could refuse to clear transactions involving sanctioned entities. 

In a weekend statement, Rosneft claimed that the EU’s new measures as “unjustified and illegal.” Meanwhile, Nayara insisted that operations remain normal and said it is “exploring all legal and appropriate avenues” to respond to the situation.

India’s role in Russian crude trade under pressure

India has become one of the largest importers of Russian crude since Moscow launched its full-scale invasion of Ukraine in 2022. As Western buyers turned away, Indian refiners stepped in to process Russian oil, including into diesel and other products that were then exported globally. Until now, Nayara had continued those operations without direct interference from sanctions.

London and Brussels jointly cut the Kremlin’s oil revenues. The UK government decided to lower the price cap on Russian oil from $60 to $47.60 per barrel after the EU adopted the 18th EU sanctions package on 18 July.

According to Western analysts, Moscow’s oil profits have already dropped by 35% compared to last year. The new lower price cap will further restrict the Kremlin’s financial resources used to fund its aggression against Ukraine.

“The UK and its EU allies are turning the screw on the Kremlin’s war chest by stemming the most valuable funding stream of its illegal war in Ukraine even further,” said UK Chancellor of the Exchequer Rachel Reeves.

The official added that this decisive step to lower the crude oil price cap will target Russia’s oil revenues and intensify pressure on Russian President Vladimir Putin by exploiting his greatest vulnerability.

London emphasized that the sanctions are intended to punish the aggressor and preserve the stability of the global energy market.

Oil Minister Hardeep Singh Puri says India is ready to meet its oil needs from alternative sources if Russia’s supplies are affected by secondary sanctions, Reuters reports.

US President Donald Trump has recently warned that countries continuing to buy Russian oil could face 100% tariffs if Moscow does not agree to a peace deal with Ukraine within 50 days. NATO Secretary General Mark Rutte has also stated that due to the new economic measures, countries, including India, could suffer losses if continue business with Mooscow. 

At the same time, India emphasizes energy security as a priority and says it will make decisions based on market conditions. The head of the Indian Oil Corporation, A.S. Sahni, has stated that if Russian supplies are restricted, the company will revert to traditional import schemes used before the war in Ukraine, when Moscow’s export was lower than 2%. 

So far, some large private refineries, such as Reliance Industries and Nayara Energy, continue to purchase significant volumes of Russian oil, which led to an increase in imports from Russia in the first half of 2025.

Despite the restrictions the West has already imposed on Moscow, the Kremlin continues to use its “shadow” fleet. It includes a large group of oil tankers, many of which are old and poorly maintained. 

Earlier, Ukraine’s Defense Intelligence said a powerful explosion occurred in the engine room of Russia’s  Vilamoura tanker on 27 June, while it was en route from the Libyan port of Es-Zuwaytina.

It was located about 150 km northeast of Libya’s territorial waters and was carrying approximately 1 million barrels of crude oil. The tanker sailed under the Marshall Islands flag.

The EU may revisit the vote on its 18th sanctions package against Russia as early as 18 July after the bloc’s representatives failed to reach a consensus on Wednesday, 16 July. The deadlock stems from Slovakia’s opposition, which is tied to the European Commission’s gas policy.

“No green light today on Russian sanctions during debate with ambassadors. They may return to the issue on Friday,” reports Rikard Jozwiak from Radio Free Europe/Radio Liberty.

The proposed sanctions package reportedly includes:

A “dynamic mechanism” for pricing Russian oil, 15% below the market price, which is approximately $47 per barrel

• A ban on operations involving the Nord Stream gas pipelines,
• Sanctions against a Russian oil refinery operating in India,
• Restrictions on two Chinese banks assisting Moscow in evading sanctions,
• Measures targeting Russia’s “shadow fleet” transporting energy resources outside sanctions regimes.

Meanwhile, Estonia has warned it will block the package if the provision to lower the oil price cap is removed, ERR writes.

“We have a very clear position that the oil price cap reduction must be included in this package. We hold a very firm stance on this issue,” Estonian Foreign Minister Margus Tsahkna says.

At the same time, Lithuanian Foreign Minister Kęstutis Budrys has expressed hope that pressure on Russia will only intensify, according to Delfi. He has also announced that the country will begin its work on the next 19th sanction package after the 18th is adopted. 

“The next package should follow, and we will continue this process until the Russian war machine either chokes or shuts down due to lack of revenue,” he has noted. 

Unanimity remains the EU’s only path to advancing sanctions policy, and Russia has proven adept at exploiting this vulnerability.

Russian crude continues flowing into the EU through Hungary, despite sanctions, via a covert trade network. An investigation by the Russian investigative outlet Important Stories (IStories) into Kremlin oil deals with Orbán allies uncovers how a shadowy firm helped channel over $10 billion in oil from Putin-linked circles to Hungary’s ruling elite.

Russian oil deals with Orbán allies exposed

IStories traced the vast post-2014 oil trade into the EU to Normeston Trading, a mysterious company registered in Belize and operated through Cyprus. The firm sold over 20 million tons of Russian oil to Eastern Europe between 2011 and 2023 — with about 2 million tons in 2023 alone, including over 1 million tons delivered to Hungary.

At the core of the operation is a network of business and political links stretching from the Kremlin to Prime Minister Viktor Orbán’s closest allies. The firm’s Russian side was connected to former top executives of sanctioned billionaire Gennady Timchenko, while its Hungarian ownership includes friends and business partners of Orbán.

A race car driver becomes a $10 billion oil trader

In 2014, the Slovak antimonopoly authority publicly named Normeston’s owners: Russian national Lev Tolkachev and Hungarian consultant Imre Fazakas. Tolkachev, a former Lukoil employee and amateur race car driver, officially held the stake at the time. He also managed a mid-sized auto business in Tver and founded the Rumos Racing team in Russia.

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Tolkachev’s profile stood in sharp contrast to the scale of Normeston’s operations. A former Russian official told IStories:

“In Russia under no circumstances could a race car driver, even if he’s a former oil company employee, be the real owner of an oil trading business with contracts worth billions of dollars.”

Tolkachev’s companies were also connected through shared control in 2017–2018 to those owned by Sergey Gzhelyak, a top executive for Timchenko. Another Timchenko associate, Aleksandr Zhuravlev, still sits on boards with Tolkachev in Normeston-linked firms.

Subbotin re-emerges in the oil trade from Monaco

After Tolkachev, another figure took control: Valery Subbotin, former Lukoil vice president and head of Litasco, its trading arm. Subbotin fled Russia in 2016, settling in Europe and acquiring Cypriot citizenship. In 2023, his Valna Holding Cyprus obtained a 49.9% stake in Normeston.

Subbotin had fallen out with Igor Sechin’s Rosneft during its 2016 takeover of Bashneft. According to Forbes Russia, Subbotin’s contracts were canceled, and he left under pressure. However, IStories found that even in exile, Subbotin maintained ties with Putin’s business circle and associates of former pro-Kremlin fugitive Ukrainian president Viktor Yanukovych.

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In 2023, Normeston won a Czech tender worth over $45 million — a deal Czech media linked to Subbotin. His family owns a heavily fortified villa on the French Riviera, where security measures led one witness to mistake it for Sechin’s residence.

Normeston’s deliveries grew with each wave of sanctions

Ironically, EU sanctions boosted Normeston’s activity. In 2014, after Crimea’s invasion and annexation by Russia, the company’s oil exports via Druzhba increased fivefold. After Russia’s full-scale invasion of Ukraine in 2022, shipments jumped tenfold. The trader avoided sanctions, largely because it did not buy oil directly from blacklisted firms like Lukoil.

In 2024, Ukraine sanctioned Lukoil, halting its pipeline shipments. But Hungary’s MOL stepped in to purchase the same Russian oil at the Belarus–Ukraine border and continued the deliveries under its own name. According to IStories, Lukoil previously accounted for over 40% of Druzhba’s flow.

Throughout, Normeston remained active. Its Moscow office operates from a building housing firms linked to OTP Bank, headed by Orbán ally Sándor Csányi, and associated with György Nagy — another key Hungarian figure tied to the oil trade.

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Orbán’s allies profit from gas trade too

In 2009, Hungarian oil and gas company MOL sold 50% of its gas trader MET to Normeston. Just two years later, that stake was transferred to Orbán’s associates — István Garancsi and György Nagy. MET quickly grew into a giant, operating in 17 countries with nearly €18 billion in annual turnover.

Anti-corruption researchers in Hungary described the deal as one of the most “critical episodes in the country’s economic history.” According to reports cited by IStories, the MET owners earned over $200 million in a single year by purchasing cheap spot gas and selling it domestically — all with Kremlin knowledge and apparent approval.

A source from within the Hungarian government told Direkt36, iStory’s partner in the investigation, that Russian authorities could have blocked MET’s deals but didn’t.

Old Soviet ties in modern energy networks

Hungarian co-owner Imre Fazakas, who held a 16.7% stake in Normeston, studied in Lviv and worked in Moscow in the 1980s as deputy director of Videoton’s local office. He became familiar with Soviet oil operations while coordinating computer systems for drilling rigs and transportation systems.

Fazakas later consulted for MOL and served on the board of MET — alongside Tolkachev. A former Hungarian official told Direkt36 that Videoton had strong ties to the Soviet military sector and state security.

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Another Hungarian shareholder, the Madera Investment Fund, which owns 33.4% of Normeston, is linked to György Nagy, a powerful businessman and partner of Garancsi and Csányi. Nagy graduated from Russia’s MGIMO international relations university and secured major government contracts during Orbán’s premiership — including a $5 million IT deal with the Hungarian post office.

His companies also serve OTP Bank—still doing business in Russia—and telecom clients, including MOL. 

Hungary blocks sanctions — Russian oil keeps flowing

In June 2025, Hungary and Slovakia again blocked a proposed package that would have banned Russian oil and gas imports altogether.

In a June 2025 interview, Orbán went further, saying: if Vladimir Putin visits Hungary, he would be received “with all due honors.”

In 2024, Orbán echoed Russia’s narratives, claiming Europe acts “at the behest of the US” and allegedly sacrifices its own interests to support Ukraine. He insisted that Hungary would not abandon Russian oil.

Russia's crude oil shipments have dropped to their lowest level since February, as refinery processing outpaces production growth and trims available export volumes, Bloomberg reported on July 8.

Russia has used its revenues from energy exports to finance the war in Ukraine.

Seaborne crude flows averaged 3.12 million barrels a day over the four weeks to July 6, a 3% decline from the previous period ending June 29, according to tanker-tracking data compiled by Bloomberg. That's the lowest level recorded since the four-week period ending Feb. 23.

The gross value of Moscow's oil exports rose by about $100 million, or 8%, to $1.36 billion for the week ending July 6, Bloomberg said. That increase was due to higher volume, although average export prices declined for a second consecutive week.

Most of Russia's oil continues to head to Asia. Shipments to the region averaged 2.73 million barrels per day, slightly lower than the previous month. Flows to Turkey fell to 370,000 barrels a day, and shipments to Syria held steady at 25,000 barrels a day.

The European Union is seeking to tighten sanctions on Russia. Ambassadors have yet to approve the EU's 18th sanctions package due to opposition from Hungary and Slovakia. The bloc failed to adopt the new package on June 27.

The new package includes restrictions targeting Russia's energy and banking sectors, as well as transactions linked to the Nord Stream gas pipeline.

Death of top Russian oil executive fuels fresh scrutiny of elite’s ‘window falls’

The unexplained death of a top Russian oil executive on July 4 is fueling renewed scrutiny over the rising number of high-profile Russian officials and businessmen who have died under mysterious circumstances, specifically, have fallen out of windows. Andrei Badalov, vice president of Transneft, Russia’s largest state-controlled pipeline transport company,

The Kyiv IndependentTim Zadorozhnyy

Russia's crude oil production in June fell below its agreed-upon OPEC+ target, according to individuals familiar with the data interviwed by Bloomberg.

Russian producers reportedly pumped 9.022 million barrels per day last month, a figure 28,000 barrels per day below the required level, including compensation cuts. This marks the largest gap between Russia's output and its monthly quota this year, based on Bloomberg's calculations.

Historically, Russia, which co-leads the OPEC+ alliance with Saudi Arabia, has faced criticism for poor compliance with production quotas. However, the nation has shown improved adherence for most of 2025, often pumping below its required levels, according to analysis of Russian data. This increased focus on production discipline follows earlier critiques from Riyadh.

Under the terms of the OPEC+ agreement, Russia's daily production quota for June had increased by 78,000 barrels to 9.161 million barrels. However, Moscow had also committed to a 111,000 barrel-a-day compensation cut for the month, bringing its actual output target to 9.050 million barrels per day.

On July 5, eight OPEC+ nations collectively agreed to raise production by 548,000 barrels per day in August, aiming to capitalize on strong summer consumption. Analysts suggest these additional barrels may be quickly absorbed but could contribute to a crude surplus later in the year.

Independent verification of Russia's oil output data has become challenging since Moscow classified official figures after Western sanctions targeting the nation's energy industry following its full-scale invasion of Ukraine. Consequently, market watchers now largely rely on indicators such as seaborne exports and domestic refinery runs to track trends in Russia's oil production.

Russia striking NATO while China invades Taiwan ‘plausible’ scenario, experts say

If Beijing moves against Taiwan, NATO might soon find itself in a two-front war with China and Russia — or so the alliance’s secretary general believes. “If Xi Jinping would attack Taiwan, he would first make sure that he makes a call to his very junior partner in all of this, Vladimir Vladimirovich Putin… and telling him, ‘Hey, I’m going to do this, and I need you to to keep them busy in Europe by attacking NATO territory,’” Secretary General Mark Rutte said in a July 5 interview with the New

The Kyiv IndependentMartin Fornusek

Russia's economy, which defied initial sanctions and saw growth propelled by massive military spending and robust oil exports, is now showing significant signs of a downturn.

Recent economic indicators are flashing red, with manufacturing activity declining, consumer spending tightening, and inflation remaining stubbornly high, straining the national budget, the Wall Street Journal (WSJ) reported on July 4.

Russian officials are openly acknowledging the risks of a recession. Economy Minister Maxim Reshetnikov warned last month that Russia was on the "verge of a recession," while Finance Minister Anton Siluanov described the situation as a "perfect storm." Companies, from agricultural machinery producers to furniture makers, are reducing output. The central bank announced on July 3 it would debate cutting its benchmark interest rate later this month, following a reduction in June.

While analysts suggest this economic sputtering is unlikely to immediately alter President Vladimir Putin’s war objectives—as his focus on "neutering Ukraine" overrides broader economic concerns—it exposes the limits of his war economy.

The slowdown indicates that Western sanctions, though not a knockout blow, are increasingly taking a toll. If sanctions intensify further or global oil prices fall, Russia’s economy could face more severe instability. This downturn undermines Putin's strategic bet that Russia can financially outlast Ukraine and its Western allies, suggesting Moscow may struggle to finance the war indefinitely.

Death of top Russian oil executive fuels fresh scrutiny of elite’s ‘window falls’

The unexplained death of a top Russian oil executive on July 4 is fueling renewed scrutiny over the rising number of high-profile Russian officials and businessmen who have died under mysterious circumstances, specifically, have fallen out of windows. Andrei Badalov, vice president of Transneft, Russia’s largest state-controlled pipeline transport company,

The Kyiv IndependentTim Zadorozhnyy

Experts warn that Russia's economic growth model, overly reliant on military spending, is unsustainable and necessitates a contraction of civilian economic capacities to free up workers for the war machine, which is not a viable long-term strategy. Putin recently dismissed suggestions that the war is stifling the economy, echoing Mark Twain by stating reports of its death "are greatly exaggerated." However, he also cautioned that a recession or stagflation "should not be allowed under any circumstances."

After a brief recession in 2022, military spending, which accounts for over 6% of gross domestic product this year (the highest since Soviet times) and approximately 40% of total government spending, had propped up Russia’s economy and blunted the impact of Western sanctions. Russia’s ability to reroute oil exports to China and Beijing’s support with electronics and machinery provided additional economic stimulus. This created an economic paradox: the most sanctioned major economy was, for a period, growing faster than many advanced economies.

However, this military spending "sugar rush" fueled runaway inflation, compelling the central bank to raise interest rates to a record 21% to try and tame it. Higher interest rates increased borrowing costs for businesses, curbing investment, expansion plans, and squeezing profits. The economic comedown has already begun.

Official data shows Russian GDP growth slowed to 1.4% in the first quarter compared to a year earlier, down significantly from 4.5% in the fourth quarter of 2024. S&P Global’s purchasing managers’ index indicated Russia’s manufacturing sector contracted at its sharpest rate in over three years in June, and new car sales dropped nearly 30% year-over-year in June.

Businesses across Russia are feeling the effects, according to the WSJ. Rostselmash, the country’s largest producer of agricultural machinery, announced in May it would cut production and investment, and pull forward mandatory annual leave for its 15,000 employees due to a lack of demand. In Siberia, electricity grid operator Rosseti Sibir stated it was on the verge of bankruptcy due to high debt, halting investments and proposing tariff hikes for industrial users.

While some analysts argue the Russian banking system remains stable, others warn of increasing instability. A recent report by the Washington, D.C.-based Center for Strategic and International Studies (CSIS) highlighted risks from a government decision to control war-related lending at major Russian banks. The state could direct banks to offer preferential loans, potentially forcing the government to absorb losses if high interest rates prevent companies from meeting obligations.

The Moscow-based Center for Macroeconomic Analysis and Short-Term Forecasting also assessed in May that the risk of a protracted systemic banking crisis in 2026 was "moderate" and growing.

These economic challenges intensify pressure on the Kremlin by reducing its financial capacity to fund its war in Ukraine. The government has operated with a budget deficit throughout the war and projects this will continue for at least two more years. This fiscal strain could provide an opening for Western nations to implement more powerful sanctions.

Falling oil prices present another significant risk for Russia, as energy sales account for about a third of its budget revenues. The price of Russian crude has consistently remained below the level assumed in this year’s budget, and Russia’s oil-and-gas revenue in June fell to its lowest level since January 2023, according to Finance Ministry data.

Trump says Putin ‘wants to keep killing people,’ signals US may send Patriots to Ukraine

“It just seems like he wants to go all the way and just keep killing people. It’s not good,” U.S. President Donald Trump said.

The Kyiv IndependentTim Zadorozhnyy

Iran is reportedly preparing to mine the Strait of Hormuz, a move that would spike global oil prices and give a significant boost to the Russian economy and its war machine in Ukraine.

Reuters reported on July 1 that Iran loaded naval mines onto vessels in the Persian Gulf last month, citing two U.S. officials, who said the preparations had been detected after Israel launched its "preemptive" attack against Iran on June 13.

Amid the conflict with Israel which has currently settled into an uneasy ceasefire, Iran has repeatedly threatened to block the Strait of Hormuz as a means of deterrence.

If the Strait were mined, Iran could block one-fifth of global oil demand and spike world energy prices — a boon for Russia's oil-dependent economy.

"Any disruption to Gulf supplies would push up global crude prices. Prices for Russian crude would rise in line," John Gawthrop, Argus Eurasia Energy editor, told the Kyiv Independent.

Russia’s energy sector made up 35-40% of its budget revenues pre-full-scale invasion and is powering its war machine.

Western sanctions on Russian energy and the G7’s Russian oil price cap of $60 per barrel have hampered its profits, with Russia losing more than $150 billion over the last three years, but have yet to deal a crippling blow.

The conflict between Israel and Iran caused a spike in prices — Brent crude, the global benchmark, on June 13 jumped from $69.36 to $75 per barrel, a surge that looked like it could grant Russia's economy a reprieve.

Until the Israeli attacks, the future for Russian crude wasn’t looking so bright. Europe was planning its 18th sanctions package targeting Russia's energy sector, and the G7 was pushing for a $45 price cap. Hungary and Slovakia have since blocked the sanctions package.

Prices have since settled along with the conflict and on July 2 Brent crude was $67.50, but if Iran does go ahead with mining the Strait of Hormuz, blocking one-fifth of global oil demand, another surge would follow.

This would also mean Iran blocks its own oil exports too, so it would only be a last resort from Tehran, David Fyfe, chief economist at Argus Media, a market analyst group, told the Kyiv Independent last month.

Arrests, raids, beaten and bloodied suspects — how Russia-Azerbaijan relations have unravelled

Deaths in custody, media offices raided, and beaten and bloodied suspects paraded in court — relations between Russia and Azerbaijan, once considered close, have sharply deteriorated in recent days amid a series of high-profile incidents. The latest tensions erupted over the weekend when Russian law enforcement officers detained over 50 Azerbaijani

The Kyiv IndependentTim Zadorozhnyy

Ukrainian drones struck the Saratovorgsintez oil refinery in Russia's Saratov Oblast, causing damage to the facility, Ukraine's General Staff reported on July 1.

"An important facility has been hit," the General Staff said via its official Telegram channel.

The Saratovorgsintez refinery and chemical plant, owned by Russian energy giant Lukoil, is located nearly 1,500 kilometers (930 miles) from Ukraine's border in the city of Saratov. The city hosts multiple strategic military and industrial sites.

The refinery was targeted to "reduce the enemy's offensive capabilities," the General Staff wrote.

"The occupiers use the capacity of this refinery to supply fuel and lubricants to Russian military units involved in the armed aggression against Ukraine."

The attack was a joint operation carried out by Ukraine's military intelligence agency (HUR) and other military units, the General Staff said. A fire broke out at the site of the attack and damage to the refinery's technological installations has been confirmed. The full consequences of the strike are still being investigated.

The Kyiv Independent could not verify these claims.

The report is the latest in a series of announcements on July 1 about successful Ukrainian strikes on Russian targets. Earlier in the day, HUR released footage of Ukraine's UJ-26 drones, commonly known as Bober (Beavers), targeting high-value Russian air defenses and a fighter jet in occupied Crimea.

A source in the Security Service of Ukraine (SBU) told the Kyiv Independent that Ukrainian drones struck a major Russian military plant in the city of Izhevsk, over 1,300 kilometers (800 miles) from the front lines.

Ukraine also hit a Russian command post in occupied Donetsk Oblast, according to the General Staff.

Ukraine war latest: Ukrainian drones strike Russian plant 1,300km from border, SBU source says

Key developments on July 1: * ‘With surgical precision’ — Ukrainian drones strike Russian plant 1,300km away, SBU source says * Russian missile strike on Dnipropetrovsk Oblast kills brigade commander, injures 30 people, Zelensky says * Ukrainian forces hit Russian command post in occupied Donetsk Oblast, General Staff says * Zelensky signs ratification of

The Kyiv IndependentThe Kyiv Independent news desk

Editor's note: The article was updated with a statement from Ukraine's military intelligence agency.

A tanker carrying 1 million barrels of oil experienced an explosion near Libya, its operator, TMS Tankers, said on June 30. The vessel, Vilamoura, is now being towed to Greece, where the extent of the damage will be assessed upon arrival.

The blast caused the engine room to flood due to water intake, though the cause of the explosion remains unclear, according to a company spokesperson.

The spokesperson confirmed that the crew is safe and no pollution has been reported.

The explosion occurred on June 27 as the vessel was departing the Libyan port of Zuwetina, some 150 kilometers (90 miles) northeast of Libyan territorial waters, Ukraine's military intelligence reported.

The incident comes amid a series of unexplained blasts targeting oil tankers that had previously visited Russian ports. In response, shipowners have started inspecting their vessels for mines using divers and underwater drones.

Vilamoura had visited Russian oil terminals twice since April, loading Kazakh-origin crude rather than Russian oil. According to Bloomberg vessel-tracking data, the tanker called at the Russian port of Ust-Luga in early April and at the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk in May. Both terminals primarily handle Kazakh crude exports.

Maritime risk consultancy Vanguard Tech reported that four other vessels have been damaged by explosions since the beginning of the year. Each had recently docked at Russian ports, the firm said.

Ukraine has targeted Russian energy assets throughout the full-scale invasion, including a drone strike in February on the CPC pipeline, a route responsible for moving roughly 80% of Kazakhstan’s oil exports.

Russia-Iran alliance wavers as Tehran suffers major blows

Tehran, Russia’s main ally in the Middle East, has been dealt a heavy blow as Israel dismantled its network of proxies and then struck targets in Iran. The recent Iranian-Israeli war, which ended with a ceasefire on June 24, showed that the regional balance of power has shifted in Israel’s favor. This could have a major impact on Russian-Iranian relations as Moscow will have to recalibrate its approach to the region. Russian-Iranian cooperation is likely to continue but Iran’s ability to help

The Kyiv IndependentOleg Sukhov

Around 50% of Americans support sanctions against countries that purchase Russian oil and gas, according to the results of a YouGov poll published on June 27.

A bipartisan sanctions bill in the U.S. Senate aims to slap 500% tariffs on imports from countries that continue to purchase Russian energy products. U.S. President Donald Trump has not backed the measure and a vote on the bill has reportedly been postponed.

In a YouGov survey of adult U.S. citizens conducted June 12-16, 24% said they "strongly support" sanctioning Russian energy buyers while 25% said they "somewhat support" secondary sanctions against these countries.

Like the Senate bill, support for secondary sanctions among respondents was bipartisan. Of "strong supporters," 26% indentified as Democrats while 27% were Republicans.

More Republicans than Democrats said they favored the specific 500% tariff penalty proposed by legislators. While 29% of respondents who "strongly supported" the measure were Democrats, 41% were Republicans. Only 32% of survey respondents overall said they supported the 500% tariff.

The 500% tariff has been championed by Republican Senator Lindsey Graham, a Trump ally and co-author of the sanctions bill alongside Democrat Richard Blumenthal. Along with tariffs on countries purchasing Russian oil, the bill would also slap "bone-crushing" new sanctions against Russia, according to Graham.

A majority of Americans support increasing or maintaining U.S. sanctions against Russia, the survey found. Here the division along party lines is stark, with 59% of those in favor of increasing sanctions on Moscow identifying as Democrats and only 37% identifying as Republicans.

The poll also showed that about 50% of Americans oppose cutting military aid to Ukraine. According to YouGov, 26% of U.S. adults are in favor of increasing military aid while 23% believe Washington should maintain its current levels of support.

The results illustrate the contrast between the prevailing views of the American public and the policies of the Trump administration. Trump has repeatedly undercut the Senate sanctions bill, requesting delays to the vote and calling on lawmakers to weaken the proposed measures.

While Trump has at times threatened to impose new sanctions on Russia, he has never followed through on any of those threats and consistently shoots down domestic and international appeals to get tough on Moscow. At the recent G7 Summit in Canada, Trump reportedly insisted that sanctions would be at odds with U.S. business interests.  

U.S. Defense Secretary Pete Hegseth also announced earlier this month that Washington will cut military aid to Ukraine in its upcoming defense budget.

‘Putin cannot stop’ – Estonian foreign minister says war in Ukraine existential for Russian president

As Russia continues to intensify its onslaught on Ukraine more than three years into the full-scale invasion, Kyiv faces a new challenge – keeping its Western allies, namely the new U.S. administration, engaged in the struggle. This became clear during the NATO summit in The Hague on June 24-25, where

The Kyiv IndependentMartin Fornusek

Ukraine's Armed Forces struck the Atlas oil depot in Russia's Rostov Oblast overnight on June 23, the General Staff reported.

The attack ignited a fire at the site, with Ukrainian forces saying the strike had reached its intended target. The facility supplies fuel and lubricants to Russian military units.

Yuri Slyusar, the acting governor of Rostov Oblast, confirmed that a fire occurred at an industrial facility after the attack. He added that no one was injured.

The full extent of the damage is still being assessed, according to the military.

Located near the Azov Sea and bordering Ukraine, Rostov Oblast plays a crucial logistical role for Russia's war effort due to its proximity to front-line operations. The same depot was previously targeted in November 2024.

"The defense forces continue to take all measures to undermine the military and economic potential of the Russian occupiers and force the Russian Federation to stop its armed aggression against Ukraine," the General Staff said.

The strike is part of Ukraine's broader campaign aimed at disrupting Russian supply chains and degrading its capacity to sustain the full-scale invasion.

Fuel depots, rail infrastructure, and ammunition stockpiles inside Russia and occupied territories have increasingly become targets for long-range drone and missile strikes.

Explained: How Ukraine and Russia swap prisoners of war

Even after Ukraine cut diplomatic ties with Russia in 2022, prisoner exchanges have continued as one of the few remaining channels of communication between the two countries. Negotiated behind closed doors and carried out irregularly, POW swaps — and the decisions surrounding them — have long been shrouded in secrecy. Controversies have

The Kyiv IndependentDaria Shulzhenko

U.S. President Donald Trump on June 23 called for urgent measures to prevent rising oil prices amid escalating tensions with Iran.

"Everyone, keep oil prices down. I'm watching," Trump wrote on Truth Social. "To the Department of Energy: Drill, baby, drill! And I mean now."

The post comes after global oil prices surged on June 13 following a series of Israeli air strikes on Iranian nuclear facilities. The escalation sparked fears of broader conflict in the energy-rich Middle East, home to critical oil shipping routes.

The surge in oil prices risks undermining Western attempts to curb Russia's war funding, as the Kremlin relies heavily on oil revenues to sustain its invasion of Ukraine. President Volodymyr Zelensky has warned that a price surge could further embolden the Kremlin.

On June 21, the U.S. joined Israel in conducting airstrikes that targeted three nuclear facilities in Iran — Fordow, Natanz, and Esfahan. The operation triggered a strong response from Tehran, which threatened to block the Strait of Hormuz, a key global oil transit route.

U.S. Vice President JD Vance responded on June 22 that any Iranian attempt to shut the strategic waterway would "destroy their own economy." The strait is a vital chokepoint for global energy supplies, with nearly a fifth of the world's oil passing through it daily.

Amid the turmoil, the EU has reportedly postponed plans to tighten the $60-per-barrel price cap on Russian crude, originally imposed in December 2022. The mechanism restricts Western firms from shipping or insuring Russian oil sold above that threshold.

The Russian Finance Ministry has relied heavily on energy revenues to sustain defense spending, which hit record highs this year.

Ukraine has evidence Russia prepares military operations in Europe, Zelensky says

“We are observing a continued intellectual decline within the Russian leadership and have evidence that they are preparing new military operations on European territory,” President Volodymyr Zelensky said.

The Kyiv IndependentNatalia Yermak

Ukrainian strikes deep inside Russian territory between January and May have cost Russia over $10 billion, including $1.3 billion in direct damage to industrial facilities and infrastructure, Commander-in-Chief Oleksandr Syrskyi told journalists on June 21.

The indirect damage caused by the disruption of Russian industrial activities is estimated at $9.5 billion, putting the cost-to-result ratio of Ukrainian deep strikes at 1:15, Syrskyi said at a briefing attended by the Kyiv Independent.

Kyiv has ramped up drone attacks against Russian military and industrial sites far behind the border as part of its DeepStrike strategy, seeking to undermine Moscow's ability to wage war.

The attacks targeted Russia's oil refining sector, the fuel and lubricants facilities, energy and transport support, and strategic lines of communication.

"Remember that during negotiations, the Russian side listed a halt to strikes against the oil refining industry as one of the conditions. This shows that our strikes are truly effective," Syrskyi said.

Oil and gas exports are among Russia's key revenue sources and play a crucial role in sustaining its war effort.

"Of course, we will continue (attacking deep inside Russian territory). We will increase the scale and the depth," the commander added, stressing that the attacks target solely military facilities.

Ukraine has increased the production of long-range drones with the support of Western partners and developed new tactics in striking Russia behind the lines.

In one of the most audacious attacks, the Security Service of Ukraine (SBU) on June 1 struck dozens of Russian bombers and other aircraft across four different air bases in an operation dubbed Spiderweb. SBU drones were smuggled to Russia in trucks and then deployed to attack airfields thousands of kilometers from the Russia-Ukraine border.

Russia ‘afraid to admit’ scale of losses, trying to hide by dumping soldiers’ bodies on Ukraine, Zelensky says

Ukrainian authorities have confirmed that at least 20 of the bodies Russia returned as Ukrainian were actually Russian soldiers, President Volodymyr Zelensky said.

The Kyiv IndependentTim Zadorozhnyy

The European Union has postponed a move to lower the existing price cap on Russian oil, after concerns that the Iran-Israel conflict could lead to higher prices, Politico reported on June 20, citing unnamed diplomatic sources.

The price cap, introduced in December 2022 as a measure to limit the Kremlin's ability to finance its war against Ukraine, prohibits Western companies from shipping, insuring, or otherwise servicing Russian oil sold above $60 per barrel.

Ukraine has been calling on Western partners to lower the price cap on Russian oil from $60 to $30 per barrel. Meanwhile, two diplomats told Politico that the escalation of the conflict between Iran and Israel would make it impossible to impose new restrictions.

"The idea of lowering the price cap is probably not going to fly because of the international situation in the Middle East and the volatility," said one diplomat on the condition of anonymity.

The issue of reducing the price cap on Russian oil was discussed during the Group of Seven (G7) summit, which was held June 15-17 in Canada. However, the participants failed to reach a consensus.

"At the G7 meeting this week, it was agreed by all the countries they would prefer not to take the decision right now," the diplomat added. "The prices were quite close to the cap; but now the prices are going up and down, the situation is too volatile for the moment."

European Commission President Ursula von der Leyen said during the G7 summit that the existing measures on Russian oil exports "had little effect," while noting that oil prices had risen in recent days, so "the cap in place does serve its function. "

Global oil prices spiked on June 13, after Israeli strikes on Iran triggered a long-range war between the two countries that has continued for over a week.

Brent and Nymex crude prices surged more than 10% before stabilizing around 7.5% higher, with Brent at $74.50 a barrel and Nymex at $73.20 as of June 20, the BBC reported.

The spike threatens to undermine Western efforts to restrict the wartime revenue of the Russian state, which depend heavily on oil exports.

EU High Representative Kaja Kallas previously urged the European Union to pursue lowering the oil price cap on Russian oil, even without U.S. support, warning that Middle East tensions could otherwise drive prices up and boost Russia's revenues.

After 3 years of full-scale war in Ukraine, Europe finally lays out road map to detox from Russian oil and gas

After three years of limited measures and political hangovers, the European Union has laid out a legal roadmap to finally end its long-standing addiction to Russian oil and gas. Under a new legislative proposal announced in Strasbourg on June 17, Brussels aims to cut off all remaining imports of Russian

The Kyiv IndependentAlex Cadier

Australia has, for the first time, imposed sanctions on Russia's so-called "shadow fleet" of oil tankers, targeting 60 vessels used to circumvent international sanctions and sustain the Kremlin's war effort in Ukraine, the Australian government said on June 18.

The move aligns Canberra with similar measures introduced by the United Kingdom, Canada, and the European Union.

Australia's Foreign Ministry said the sanctioned vessels operate under "deceptive practices, including flag-hopping, disabling tracking systems and operating with inadequate insurance," enabling illicit Russian oil trade that undermines international sanctions.

"Russia uses these vessels to circumvent international sanctions and sustain its illegal and immoral war against Ukraine," the ministry said in a statement.

With this move, Australia has now sanctioned more than 1,400 Russian individuals and entities since Moscow's full-scale invasion of Ukraine began in February 2022, the government said.

The step comes amid the continued operation of Russia's shadow fleet. According to a recent study by the Kyiv School of Economics (KSE), Russia currently operates 435 tankers outside the control of Western regulators to evade sanctions such as the G7-EU price cap on Russian oil.

These vessels are typically un- or underinsured and pose a rising environmental risk due to their age and operational opacity.

KSE estimates that as of April 2024, 83% of Russia's crude oil and 46% of its petroleum product exports were shipped using shadow fleet tankers. The study warns that this undermines the effectiveness of Western sanctions and increases the likelihood of maritime disasters, as many of these ships fall outside international safety and insurance standards.

The EU formally adopted its 17th sanctions package against Russia in May, sanctioning nearly 200 vessels tied to the shadow fleet. EU foreign policy chief Kaja Kallas said the new measures also target hybrid threats and human rights violations, with more sanctions under consideration.

Some EU member states and observers have criticized the package for lacking stronger provisions to disrupt Russia's sanction evasion schemes.

Now, the EU seeks to approve its 18th sanctions package, which will add 77 more shadow fleet vessels to comply with the cap to prevent Russia from circumventing sanctions and propose imposing a ban on imports of petroleum products made from Russian oil.

The United States has signaled reluctance to pursue additional sanctions despite Moscow's continued aggression in Ukraine and rejection of ceasefire proposals supported by Western allies.

Putin ‘cannot be trusted’ as mediator, Kallas says, urges EU to tighten Russian oil cap after deadly Kyiv strike

EU High Representative Kaja Kallas urged the European Union to press forward with lowering the oil price cap on Russian crude, even without U.S. support, warning that Middle East tensions could otherwise drive prices up and boost Russia’s revenues.

The Kyiv IndependentAnna Fratsyvir

Russian President Vladimir Putin "cannot be trusted" to mediate peace in the Middle East while continuing to launch brutal attacks against civilians, EU High Representative Kaja Kallas said on June 17, following a mass Russian strike on Kyiv that killed at least 21 people and injured over 130.

"Clearly, President Putin is not somebody who can talk about peace while we see actions like this,” Kallas said during a briefing in Brussels. "He's not a mediator that can really be considered. Russia cannot be a mediator if they don't really believe in peace."

Russia has sought to position itself as a potential mediator in the escalating conflict between Israel and Iran. Kremlin spokesperson Dmitry Peskov said on June 17 that Israel appeared unwilling to accept Russia’s offer of mediation.

President Donald Trump said on June 15 that Putin had expressed willingness to help mediate between Tel Aviv and Tehran — an idea already dismissed by France. EU leaders have also questioned Moscow’s neutrality given its deep military ties with Iran, which has supplied Russia with drones and missiles used in attacks on Ukraine.

Kallas also pointed to Iran's role in enabling Russia's attacks. "Iran has helped Russia do these attacks… their cooperation is working in this regard," she said.

Kallas urged the European Union to press forward with lowering the oil price cap on Russian oil, even without U.S. support, warning that Middle East tensions could otherwise drive prices up and boost Russia's revenues.

"The whole idea of the oil price cap is to lower the prices," Kallas said. "We shouldn't end up in a situation where the crisis in the Middle East increases oil prices and makes Russia earn more… that would mean they can fund their war machine on a bigger scale."

Her warning comes after global oil prices soared on June 13, following an Israeli strike on Iran that raised fears of a broader regional conflict. Brent and Nymex crude prices surged more than 10% before stabilizing around 7.5% higher, with Brent at $74.50 a barrel and Nymex at $73.20, the BBC reported.

The spike threatens to undermine Western efforts to restrict Russia’s wartime revenues, which heavily depend on oil exports.

Earlier, Kallas said the EU can act independently to lower the oil price ceiling, noting that most Russian crude flows through European-controlled waters.

"Even if the Americans are not on board, we can still do it and have an impact," she said.

Her remarks come as the EU works on its 18th sanctions package targeting Russia's energy, banking, and defense sectors. The 17th package entered into force on May 20. European Commission President Ursula von der Leyen has said new measures will further target Russia's war-sustaining supply chains.

Kallas spoke hours after one of Russia's deadliest attacks on Kyiv since the start of its full-scale invasion. The nearly nine-hour assault saw Moscow fire 472 aerial weapons, including over 280 Shahed drones and multiple cruise and ballistic missiles.

Ukraine's Air Force reported intercepting 428 targets, but several missiles hit residential buildings, including a nine-story apartment block in Solomianskyi district, where 16 people were killed.

President Volodymyr Zelensky called the assault "one of the most horrifying attacks on Kyiv" and again called on Western leaders to act decisively.

After 3 years of full-scale war in Ukraine, Europe finally lays out road map to detox from Russian oil and gas

After three years of limited measures and political hangovers, the European Union has laid out a legal roadmap to finally end its long-standing addiction to Russian oil and gas. Under a new legislative proposal announced in Strasbourg on June 17, Brussels aims to cut off all remaining imports of Russian

The Kyiv IndependentAlex Cadier

An uninsured Russian Aframax-class tanker has been illegally conducting ship-to-ship oil transfers in international waters near Greece and Cyprus since July 2024, Ukraine's military intelligence (HUR) reported on June 16.

According to the agency, the vessel, operating without Western insurance, is part of Russia's expanding shadow fleet used to bypass G7 and EU sanctions on Russian oil exports.

HUR said such transfers "pose an environmental threat, allow the aggressor to conceal the origin of oil, evade international control, and ensure its supply to third countries in circumvention of sanctions."

Ukraine has identified the tanker as IMO 9247443 and listed it on the War&Sanctions platform, along with 159 other tankers allegedly belonging to Russia's shadow fleet and 55 captains involved in sanction-busting operations.

Despite price caps and Western restrictions, Russia continues to profit from oil and gas exports, which remain a vital revenue source. According to HUR estimates, roughly one-third of those profits are expected to fund Russia's war against Ukraine in 2025.

In May, the EU approved its 17th sanctions package, targeting nearly 200 shadow fleet vessels. The U.S. Treasury had earlier sanctioned over 180 tankers, which together accounted for nearly half of Russia's offshore oil shipments.

While the Biden administration ramped up pressure on Russia's oil trade early in 2024, U.S. President Donald Trump has since declined to impose new sanctions, despite Moscow's continued refusal to agree to a ceasefire.

EU leaders call for tougher sanctions on Russia at G7 summit

“To achieve peaceful strength we must put more pressure on Russia to secure a real ceasefire, to bring Russia to the negotiating table, and to end this war. Sanctions are critical to that end,” European Commission President Ursula von der Leyen said.

The Kyiv IndependentAbbey Fenbert

The United States is opposing a proposal by other Group of Seven nations to lower the price cap on Russian oil, Bloomberg reported on June 13.

Citing unnamed sources, Bloomberg said the U.S. remains opposed to reducing the cap from $60 to $45 per barrel – a position it first took earlier this year when Treasury Secretary Scott Bessent declined to support a similar effort.

The price cap, introduced in December 2022 as a measure to limit the Kremlin's ability to finance its war against Ukraine, prohibits Western companies from shipping, insuring, or otherwise servicing Russian oil sold above $60 per barrel.

Despite U.S. resistance, the European Union and United Kingdom – backed by other European G7 countries and Canada – have said they are prepared to move forward with the proposal, even without Washington's endorsement.

One source told Bloomberg that the EU and U.K. could explore lowering the cap without the U.S., as most of Russia's oil is transported in European waters. However, a unified G7 agreement would carry greater impact if it could be enforced by the U.S.

The price cap debate has become more urgent as oil prices, which had fallen below the $60 cap in recent months, surged following Israel's strikes against Iran in the past 24 hours.

G7 leaders will revisit the price cap discussion during the upcoming summit, hosted by Canada from June 15-17 in Kananaskis County, Alberta.

The summit agenda will also include topics such as support for Ukraine in the Russian war, global economic stability, digital transformation, and climate change.

The G7 currently includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The European Union is also represented in the group.

Israel-Iran war could provide economic boost Russia needs to continue fight against Ukraine

Israel’s “preemptive” strikes against Iran targeting the country’s nuclear program and killing top military officials could have far-reaching implications for Ukraine and could boost Russia’s ability to continue its full-scale invasion, experts have told the Kyiv Independent. Iran has been one of Russia’s staunchest allies throughout the war, providing thousands

The Kyiv IndependentChris York

Global oil prices soared on June 13  after Israel launched a strike on Iran, triggering fears of a broader conflict in the energy-rich Middle East that could disrupt global supplies, the BBC reported.

The spike threatens to undermine Western efforts to choke off a vital revenue stream for Russia, which relies heavily on oil profits to sustain its war in Ukraine.

According to the BBC, Brent and Nymex crude prices jumped by more than 10% following the Israeli attack, reaching their highest levels since January. Prices later stabilized but remained about 7.5% higher, with Brent at $74.50 a barrel and Nymex at $73.20.

The price surge comes at a crucial time for Ukraine and its Western allies, who are intensifying efforts to minimize the Kremlin's oil revenues — the backbone of Russia's wartime economy.

President Volodymyr Zelensky urged the European Union on June 11 to impose tougher sanctions on Russia, including a more aggressive price cap on oil exports.

"A ceiling of $45 per barrel of oil is better than $60, that's clear," Zelensky said at the Ukraine-Southeast Europe Summit in Odesa. "But real peace will come with a ceiling of $30. That's the level that will really change the mindset in Moscow."

The EU's current $60 per barrel cap, introduced in December 2022, prohibits Western companies from shipping, insuring, or servicing Russian oil sold above the threshold. While this measure has curtailed some of Russia's profits, the Kremlin continues to earn significant revenue, especially when market prices rise.

European Commission President Ursula von der Leyen said on June 10 that the EU is considering lowering the cap to $45, a move that will be discussed at the G7 summit in Canada between June 15 and 17. According to Reuters, most G7 countries, excluding the U.S. and Japan, are prepared to proceed with the reduction regardless of Washington’s stance.

Israeli Prime Minister Benjamin Netanyahu said early on June 13 that Israeli forces had launched "Operation Rising Lion," a preemptive strike targeting Iran's nuclear program. In a televised address, Netanyahu claimed Israeli forces struck Iran's main nuclear enrichment site in Natanz and targeted key nuclear scientists.

Key to Russia’s defeat lies in its economy

As the war in Ukraine grinds on, attention remains fixed on the battlefield. But Russia’s most vulnerable flank is not in the trenches — it’s in the treasury. The West, and especially the United States, holds economic levers that could push Vladimir Putin toward serious negotiations or even collapse

The Kyiv IndependentWojciech Jakóbik

Most Group of Seven (G7) nations are prepared to lower the Russian oil price cap from $60 to $45 a barrel even without support from the United States, Reuters reported on June 12, citing unnamed sources familiar with the matter.

According to Reuters, the European Union and United Kingdom, backed by other European G7 countries and Canada, are ready to lead the charge in lowering the Russian oil price cap – even if U.S. President Donald Trump opts out.

The price cap, which bans Western companies from shipping, insuring, or otherwise servicing Russian oil sold above $60 per barrel, was first introduced in December 2022 as a measure to limit the Kremlin's ability to finance its war against Ukraine.

The G7 had previously attempted to lower the Russian oil price cap; however, the proposal was dropped after U.S. Treasury Secretary Scott Bessent reportedly declined to support it.

It is unclear whether the U.S. will support the decision this time around. Japan's position is also undecided.

Participating country leaders will revisit the price cap discussion at the upcoming G7 summit. Canada, which holds the G7 presidency this year, will host the summit on June 15-17 in Kananaskis County, located in the western province of Alberta.

The summit agenda will include topics such as support for Ukraine in the Russian war, global economic stability, digital transformation, and climate change.

President Volodymyr Zelensky is expected to attend the summit and seek a meeting with U.S. President Donald Trump.

EU could impose Russian oil price cap without US support, Kallas says

The European Union can impose an additional price cap on Russian oil without U.S. support, EU High Representative Kaja Kallas said at the Brussels Forum on June 11.

The Kyiv IndependentVolodymyr Ivanyshyn