Sanctions imposed on Russian crude oil have so far “failed completely” and new price caps could prove immaterial as well, analysts told CNBC.

The European Union is planning to ban imports of refined petroleum products from Russia, including diesel and jet fuel, from Sunday.

The 27-member bloc has already banned the purchase and import of sea-borne Russian crude oil since December.

In addition, the bloc — along with its allies in the Group of 7 and Australia — has set a price cap on Russian seaborne crude oil, which bars the use of Western-supplied maritime insurance, finance and other services unless they are sold below $60 per barrel.

They are part of global efforts to curb Moscow’s ability to raise funds for its war in Ukraine.

The price cap “was invented by bureaucrats with finance degrees. None of them really understand oil markets,” Paul Sankey, president and lead analyst at Sankey Research, told CNBC’s “Street Signs Asia” on Thursday.

“Its been a total bomb, it has failed completely.”

Sankey underlined it has been tough for oil markets because Russian oil supply hasn’t really been interrupted and “they’ve sustained exports at high levels.”

“I heard it from a great source that the Saudis have been asking around as to how come Russian oil is still flowing,” he said.

“That brings the question of what will happen with the sanctions coming up on products, because it just doesn’t seem to work.”

Even though volume has remained robust, the price of Russia’s Urals oil blend has fallen since before the war. Average price for Russia’s Urals oil blend was $49.48 per barrel in January this year, according to Reuters which quoted the finance ministry. That’s below the price cap of $60 set by the EU and G-7, and down 42% from January last year, according to Reuters.

Ahead of the proposed price caps on Russia’s refined products on Feb. 5, member states had yet to agree on a price cap, according to Reuters. It is hoped that a deal can be reached by Friday.

Sankey’s criticism runs contrary to a recent report from the Centre for Research on Energy and Clean Air.

The report by the independent Finnish think tank found the first month of the EU’s ban on seaborne imports of Russian crude and the G-7′s price cap had cost Moscow an estimated 160 million euros ($174.3 million) per day.

It said those measures were largely responsible for a 17% fall in Russia’s earnings from fossil fuel exports in the final month of 2022. 

Still, Vandana Hari, founder of analytics firm Vanda Insights, said she too was skeptical about the upcoming restrictions on Russian refined oil products.

“The crude price cap was pretty inconsequential,” Hari told CNBC’s “Squawk Box Asia” on Thursday.

“I think the refined product caps that they’re planning — about a $100 [per barrel] for diesel and clean products and perhaps around $45 for dirty fuels like fuel oil — are probably going to be immaterial as well.”

Russian oil will find its way into the markets that are “still welcoming it” like China and India, according to Hari.

“China and India have benefited quite a big deal last year from heavily discounted Russian crude prices and the same’s going to happen to Russian refined products,” Hari noted, although it could be more complicated for Moscow to find markets for such products, she added.  

Both China and India have increased their purchases of Russian oil in the wake of Moscow’s invasion of Ukraine, benefiting from discounted rates.

Sankey further noted “oil friendships are greasy” and there’s a lot of different ways to move Russian oil around the world bypassing the price caps.

“One of the things people have highlighted is look at Malaysian oil. Its crude oil exports to China is at 1.5 million barrels a day,” said Sankey. “Malaysia only produces 400,000 barrels a day. I don’t think that’s Malaysian crude. So there’s plenty of stuff moving around outside these … theoretical caps. “

Separately, Hari said China’s sudden reopening is unlikely to move the needle on oil prices in the near term.

Hari highlighted she does not believe oil prices will hit $100 per barrel anytime soon as a result of China’s reopening, but it could happen more gradually.

There’s still a high degree of uncertainty around China’s oil demand, she added.

“The initial boost in Chinese demand is obvious. We are seeing a lot of travel happening domestically, internationally… that’s positive for jet fuel. But when does the Chinese economy actually pick up momentum again? I think that’s a big question.”

— CNBC’s Sam Meredith contributed to this article