EU’s 20th Russia sanctions package set for early 2026 as securing Ukraine financing takes priority

The European Union is expected to unveil its 20th package of sanctions against Russia shortly after the New Year, with the European Commission likely to present its proposals in January 2026, according to several EU diplomats in Brussels familiar with the process, contacted by EUalive’s partner European Pravda.

The move comes amid a temporary slowdown in sanctions planning, as the EU’s main political and financial focus has shifted to securing funding for Ukraine for the 2026-27 period.

According to diplomats who spoke on condition of anonymity, formal discussions on the next sanctions round have not yet started, largely because the Commission has not finalised its draft measures.

“The Commission is in no hurry with the 20th package of sanctions, because the main focus is currently on finding a solution for financing Ukraine in 2026-27,” one diplomat told European Pravda. EU leaders have gathered on Wednesday in Brussels for a two-day summit seen as a make-or-break attempt to secure the needed financing.

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This prioritisation has led to a decision to delay the presentation of the new sanctions package until early next year. Another diplomat said the Commission aims to have a draft ready in January, with the political goal of adopting the package by the anniversary of Russia’s full-scale invasion of Ukraine.

Previous EU sanctions packages have typically been agreed within about a month, and diplomats suggested a similar timeframe remains realistic for the 20th round.

Alongside the preparation of the next package, the EU has already decided to impose restrictive measures on vessels belonging to Russia’s so-called “shadow fleet” that transport Russian oil. These steps are being taken separately from the formal sanctions packages, reflecting growing concern in Brussels about Moscow’s ability to circumvent existing restrictions on energy exports.

At the same time, Ukrainian Foreign Minister Andriy Sybiha has urged Western partners to intensify sanctions pressure, arguing that Russia’s economy is entering a period of serious strain. In a post on X, Sybiha said available data show that the Russian economy is beginning to face “dramatic problems” and is sliding into recession.

He cited figures showing that Russia’s federal budget deficit reached a record $54 billion between January and November, with projections suggesting it could exceed $70 billion by the end of the year. For the first time since the start of the full-scale invasion, Russia’s consolidated regional budgets have also moved into deficit, reaching minus $1.5 billion compared with a $12 billion surplus a year earlier.

Energy revenues, a key pillar of the Russian budget, are also declining. According to Sybiha, oil and gas revenues in November 2025 fell by 34% year-on-year, reducing the federal budget by an additional $3.5 billion.

As a result, Moscow has been forced to raise taxes, including what Sybiha described as a particularly sensitive increase in value-added tax, while cutting subsidies for small and medium-sized enterprises.

Against this backdrop, the Ukrainian foreign minister argued that sanctions pressure should continue to intensify, pointing to what he called a “real possibility that economic pressure will become unbearable for Putin”.

“He does not count the thousands of soldiers he kills every day,” Sybiha said. “But he does watch the money that belongs to him personally and to his associates.” He stressed that the G7, the EU and the United States still retain significant leverage, noting that sanctions currently cover only about 20% of Russia’s military-industrial complex.

According to Sybiha, restrictions should be extended to the remaining parts of that sector, Russia should be denied access to technologies used to produce weapons, and all loopholes allowing sanctions circumvention should be closed. He also called for further cuts to Russia’s energy revenues and argued that, after reducing dependence on Russian oil and gas, the EU should now “put an end to dependence on Rosatom”.

Sybiha said the EU should continue introducing tariffs and other trade restrictions to further reduce imports from Russia and replace them with alternative sources, while also strengthening personal sanctions.

Meanwhile, media reports indicate that the United States is preparing new sanctions targeting Russia’s energy sector if President Vladimir Putin rejects a potential peace agreement. Ukraine’s ambassador to the U.S., Olha Stefanishyna, said a bipartisan bill has been introduced in the U.S. Senate that would impose sanctions for purchasing or facilitating imports of Russian oil and petroleum products.

Within the EU, discussions are also under way on additional measures targeting Russia’s shadow fleet, as member states look to further curb Moscow’s ability to bypass existing oil sanctions while the bloc prepares its next comprehensive sanctions package.

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Caption: EU High Representative for Foreign Affairs and Security Policy Kaja Kallas (R) greets Ukrainian Foreign Minister Andriy Sybiha during the EU Foreign Affairs Council in Brussels, Belgium, 20 May 2025. EPA/OLIVIER MATTHYS/POOL