European Union ambassadors convened on Wednesday in a bid to resolve a standoff over the 21st package of sanctions against Russia, with a hard deadline of Thursday to avert an automatic increase in the price cap on Russian oil from $44 to $58 per barrel. According to EU diplomats, the core dispute centres on proposed restrictions on the purchase, import or transshipment of Russian liquefied natural gas (LNG). Athens has emerged as the principal obstacle, arguing that curbs on transporting Russian LNG to third countries would simply shift market share to non-EU competitors without reducing Moscow’s revenue, while inflicting disproportionate damage on Greece’s dominant shipping industry.

Viewed from Brussels, the package is designed to tighten pressure on the Russian financial system at a moment of perceived vulnerability. It would add around 215 individuals and entities to the sanctions list, including 94 financial institutions, and target cryptocurrency networks used to circumvent existing restrictions. A European intelligence assessment, cited by diplomats, warned that a new wave of banking sanctions could trigger an “explosive” crisis in Russia. However, the Greek veto has exposed wider fissures: Berlin and Lisbon oppose a proposed ban on Russian fish imports, Paris and Rome seek to soften visa restrictions for Russian military personnel, and Vienna is pressing for the release of approximately €2 billion in frozen Russian assets to offset a fine imposed by Moscow on Raiffeisen Bank. EU officials are now weighing three options: granting a 24-month transition period for the LNG measures, removing that clause entirely, or abandoning the whole package.

In Moscow, the Kremlin dismissed the notion that the EU has exhausted its sanctions ideas. Spokesman Dmitry Peskov told reporters that “there is no limit to madness” and insisted that all restrictions are illegal under international law. He contended that earlier sanctions indirectly harmed European taxpayers and businesses, while the remaining measures “will directly hit the interests of a whole range of EU member states — and that is much more painful.” Peskov also reiterated that Russia’s conditions for ending the conflict, including Ukrainian withdrawal from four disputed regions and a formal renunciation of NATO membership, remain unchanged.

The oil price cap mechanism, originally set at $60 per barrel and later reduced to $44.10, was redesigned last year to track market fluctuations. A scheduled review would have raised the cap in response to the Iran-related conflict, a move that EU officials say would significantly boost Russian revenues. To prevent this, the bloc temporarily froze the cap until 23 July, but a broader agreement on the sanctions package is required to extend that freeze. With unanimity among all 27 member states needed, the ambassadors’ meeting is seen as a last-ditch effort before the deadline expires. Failure to reach a deal would not only allow the price cap to rise but also signal a deepening fragmentation within the EU over the economic costs of sustaining pressure on Moscow.