The European Union prepares to sanction Russian gas for the first time

The European Union prepares to sanction Russian gas for the first time
The European Union prepares to sanction Russian gas for the first time

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The taboo of Member States consisting of sparing the Russian gas sector from sanctions – for fear that they would harm the continent’s energy security – was partially broken this Thursday, June 20.

  • The 27 agreed on several measures, including a ban on the transshipment of liquefied natural gas (LNG) from Russia within the Union as well as the resale of Russian LNG by European ports.
  • Transshipment consists of transferring LNG from one LNG tanker to another LNG tanker or a storage terminal.
  • Icebreaker ships carrying Russian LNG — particularly to Asia — through partially frozen waters typically stop at European ports to transfer the LNG to a conventional LNG carrier.

Thus, this decision will not directly lead to the reduction in the volume of European liquefied natural gas imported by European countries. It will nevertheless hamper Russia’s ability to deliver its LNG, and is expected to affect its profits by around 28% according to initial estimates.. Other sanctions in the package are also expected to deprive Russia of access to certain technologies and block financing for Russian LNG terminals in the Arctic and Baltic Sea.

  • The Union remains the main importer of Russian hydrocarbons, in value terms, since the Russian invasion of Ukraine in February 2022.
  • In May, ICIS data indicates that Russia once again became the main gas supplier to the Union for the first time since September 2022, overtaking the United States.
  • Coal (August 2022), crude oil (December 2022) as well as refined petroleum products (February 2023) are subject, with a few exceptions, to import bans within the Union under the sanctions against Russia.

European restrictive measures on the Russian gas sector will not drastically reduce the amounts paid by member states to Moscow. This new set of sanctions nevertheless breaks a taboo which harms the credibility of the bloc.



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