European Union ambassadors will meet on Wednesday in an effort to reach a compromise with Greece and approve the bloc’s 21st package of sanctions against Russia over its war in Ukraine, EU diplomats said.

The proposed package focuses on Russia’s banking sector, aiming to put further pressure on Moscow’s financial system at a time when the bloc is seeking to reduce remaining channels for Russian trade and finance.

However, Greece has emerged as the main obstacle to the agreement, opposing planned restrictions on Russian liquefied natural gas (LNG) supplies.

Athens argues that a proposed ban on the transfer of Russian LNG would mainly redirect market share outside Europe rather than significantly reduce Russia’s revenues.

Greece is one of the world’s leading LNG shipping hubs, with a major share of Europe’s LNG carrier fleet, competing with countries such as Japan, China and the United States.

EU diplomats had expected the departure of Hungary’s former Prime Minister Viktor Orban, who had repeatedly delayed decisions on Ukraine support and Russia sanctions, to make future agreements easier.

However, disagreements have resurfaced as the European Commission attempts to close loopholes used by Russian businesses and further restrict Moscow’s energy income.

The latest package reportedly includes around 215 individuals and entities, including 94 financial institutions.

Nearly 90 of those targeted are banks, which would bring the total number of sanctioned Russian banks to more than 100, over half of Russia’s 213 internationally connected lenders.

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EU targets alternative financial networks

Western sanctions removed Russia’s major banks from the SWIFT international payment messaging system in 2022.

Despite the restrictions, Russian companies have continued some trade and financial operations through smaller regional banks and cryptocurrency networks.

A European intelligence report reviewed by Reuters warned in June that Russia could face an "explosive" banking crisis, with additional sanctions on financial institutions potentially creating further economic pressure.

Russian authorities have rejected claims of an impending banking crisis.

EU sources said the latest financial restrictions are aimed at discouraging third countries from working with targeted Russian lenders, as their links with the European market have already been significantly reduced.

Alongside financial measures, the European Commission has proposed keeping the current price cap on Russian oil at $44.10 per barrel for another six months.

The cap was redesigned last year to follow global oil price movements and was reduced from its previous level of $60 per barrel.

EU ambassadors agreed last week to temporarily maintain the current limit until 23 July while seeking a wider agreement.

A scheduled review could have raised the cap following market disruptions linked to the Iran war, potentially increasing Moscow’s oil revenues.

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