The European Union has agreed its 21st sanctions package against Russia, targeting Moscow’s financial system, energy revenues and defence industry after granting Greece a renewable exemption allowing European companies to continue transporting Russian liquefied natural gas.

The measures include 218 new sanctions listings, the bloc’s largest expansion in four years, and restrictions covering 94 Russian financial institutions, including the Moscow Exchange (MOEX: MOEX).

Thirty-two banks will be subjected to cross-border transaction bans that EU diplomats said would effectively disconnect them from Swift, the international financial messaging system. Russia’s largest banks were removed from Swift shortly after Moscow’s full-scale invasion of Ukraine in February 2022, but companies have increasingly used smaller regional lenders and cryptocurrency networks to conduct foreign trade.

Kaja Kallas, the EU’s foreign policy chief, described the package as the bloc’s “largest round in four years, totalling 218 listings”.

“We’ve hit more than a hundred banks and crypto operators, over 40 shadow fleet vessels, and several oil refineries in Russia and Belarus, who help keep Moscow’s war going,” Kallas said.

The package also sanctions 50 defence companies, including businesses involved in producing Russia’s long-range drones, as well as cryptocurrency exchanges, oil refineries and more than 40 ships associated with Russia’s “shadow fleet”.

The debate over the package has been stymied by objections from Greece which continues to make money by allowing its shipping fleet to work for Russia, despite the sanctions. Greek tankers make up a whooping fifth of the shadow fleet and are earning outsized premiums from Russian oil companies to carry their oil around the world. As has become routine for the sanctions process, the Greek shipping companies were given a calve out that preserves both their, and the Russian oil companies’, income, defeating the purpose of the sanctions: to stave the Kremlin of income it can use to fund its war in Ukraine.

The new package was approved only after Greece secured a one-year exemption, renewable automatically, allowing EU shipping companies to continue transporting Russian LNG to customers outside the bloc.

A separate prohibition on imports of Russian LNG into the EU is still expected to take effect from January 1, but in the meantime, the EU is importing record amounts of Russian gas as it races to fill underground storage tanks ahead of the heating season.

Athens had blocked agreement on the package, arguing that banning European carriers from handling Russian LNG would not reduce Moscow’s revenues but would instead transfer lucrative contracts, specialised ships and technical expertise to Chinese, Japanese or other non-European competitors.

“Europe should not end up surrendering entire sectors of economic activity or market share to non-EU players as an unintended consequence of its own sanctions policy,” a Greek government official said during the negotiations, as cited by TASS. “Sanctions should erode Russia’s economic capacity — not create strategic windfalls for others at Europe’s expense.”

The dispute centred partly on Dynagas, the privately owned Greek shipping group controlled by tycoon George Prokopiou, which operates specialised ice-class LNG carriers used by Russia’s Yamal LNG project in the Arctic.

Dynagas owns about one-third of the Arc7 fleet designed to navigate the ice surrounding Yamal. The vessels cost about $300mn each and cannot easily be transferred to conventional LNG routes.

Yamal LNG is controlled by Russian gas producer Novatek (MOEX: NVTK). France’s TotalEnergies (EPA: TTE) owns a 20% direct stake in the project and a 19.4% holding in Novatek.

“It is not clear that the project is contributing substantially to Russian revenues in the way often portrayed in public debate,” Dynagas said.

“Requiring European operators to abandon long-term contracts will not disrupt trade. On the contrary, it will result in the transfer of strategic Arctic assets [ships] and know-how to non-Western operators.”

EU countries must approve sanctions unanimously, giving individual member states a veto they can use to demand exemptions protecting national industries.

The package also freezes the western price cap on Russian crude at $44.10 a barrel for 12 months, after the EU has dropped its fixed $60 a barrel oil price cap and replaced it with a floating rate oil price sanctions cap of 15% below market rates for the Urals blend, Russia’s main export product. However, thanks to the Gulf War, a increase in prices would have increased the cap significantly, making it easier for Russia to hire EU ships to carry oil. The EU diplomats voted to suspend their own rule and keep the cap at $44.10 for the time being. This week oil price broke above $100 per barrel again after the war resumed and Houthi rebels closed down the Bab al-Mandab straits on the Red Sea.

The mechanism, introduced by the Group of Seven and the EU, permits western companies to provide shipping, insurance and other services for Russian oil only when the crude is sold below the cap.

“We’re freezing the oil price cap adjustment for a year, so that the Russian war machine does not benefit from market shocks,” European Commission president Ursula von der Leyen said.

Russia’s benchmark Urals crude was trading at about $67.50 a barrel this week, excluding shipping and insurance, while much of Russia’s oil is now transported using vessels and service providers outside the western sanctions coalition.

The agreement followed more than a week of tense negotiations that exposed the increasing difficulty Brussels faces in identifying new sanctions that do not also damage companies and industries inside the EU.

Germany and Portugal had sought concessions concerning imports of Russian fish, while France and Italy pressed for changes to restrictions affecting Russian visas. Austria again requested the release of assets connected to Raiffeisen Bank International (VIE: RBI).

While Brussels continues to expand restrictions on Russia’s banks, energy companies and military suppliers, national governments are increasingly reluctant to impose measures that carry large domestic costs.

Kallas said the EU was already preparing further sanctions, signalling that the latest agreement would not be the final attempt to restrict Russia’s ability to finance the war.