This move comes as oil revenue remains crucial for the Russian economy, allowing President Vladimir Putin to sustain military operations without worsening domestic inflation or currency issues.

The European Union is set to propose a reduction in the price cap on Russian oil from $60 to $45 per barrel, aiming to limit Kremlin profits that finance the ongoing war in Ukraine.

As part of the new sanctions, the EU plans to implement a full transaction ban on 22 additional banks, further tightening restrictions on the Russian banking sector.

However, for these new sanctions to take effect, all 27 EU member states must reach a consensus, with discussions anticipated among G7 leaders during their upcoming meeting in Canada from June 15-17.

In the backdrop of these sanctions, the Russian military has intensified its attacks on Ukraine, claiming to target military industries, including factories producing missiles and tanks.

Recent drone strikes in Ukraine have resulted in casualties, with two fatalities and nine injuries reported in Odessa, while Kyiv experienced similar tragedies.

German Chancellor Friedrich Merz condemned these Russian attacks as acts of terror against civilians, emphasizing their disproportionate nature compared to Ukraine's military responses.

Currently, Russian oil is trading at $62 per barrel, having previously dipped to $55, highlighting the ongoing volatility in the energy market.

The new sanctions will also target owners of oil tankers in various countries, including the UAE and Hong Kong, and will prohibit European companies from engaging with certain refineries linked to Rosneft.

Overall, these sanctions are designed to undermine Russia's energy sovereignty, banking sector, and military industry, reflecting the EU's commitment to a coordinated response against the Kremlin.

Despite the push for new sanctions, Hungary and Slovakia have expressed reservations, indicating potential divisions within the EU regarding the approach to Russia.

These developments follow a commitment for stringent measures against Russia, particularly after discussions between EU leaders and U.S. officials advocating for tough sanctions.