The new EU sanctions for the first time affected Russian gas. But they did not hit it
24 June 2024 14:58
The European Union has officially approved the 14th package of sanctions against Russia, which for the first time includes restrictions on the Russian gas sector. The decision was made by the EU Council on Monday, 24 June, reports
The new package of sanctions targets key sectors of the Russian economy: energy, finance and trade. It aims to make it harder to circumvent the EU’s existing restrictions. The sanctions list adds 116 more individuals and legal entities that the EU believes are responsible for actions that threaten Ukraine’s territorial integrity, sovereignty and independence.
For the first time since the beginning of Russia’s full-scale invasion of Ukraine, the sanctions have affected the gas sector of the Russian Federation. In particular, restrictions are imposed on the use of EU facilities for transshipment of Russian liquefied natural gas (LNG) to third countries. This applies to both ship-to-ship and ship-to-ship transshipment, as well as transshipment operations. The aim is to reduce Russia’s revenues from the sale and transportation of LNG.
It is important to note that these restrictions do not affect LNG imports to the EU, but only re-exports through the EU.
In addition, the EU has banned new investments and the provision of goods, technology and services for the completion of Russian LNG projects such as Arctic LNG 2 and Murmansk LNG. Restrictions have also been imposed on imports of Russian LNG through EU terminals not connected to the gas system.
The European Commission will monitor the implementation of these decisions and may propose mitigating measures if necessary.
As reported by
However, according to political analyst Yevhen Magda, no sanctions will isolate Russia from the global economy.
Europe and Russian gas
As of early 2022, the EU was 40% dependent on Russian gas. In 2021, 65% of the gas purchased by Germany was Russian. In the third quarter of 2023, only 12% of the gas imported by the EU remains Russian.
The current contract for gas supplies to Europe through the Ukrainian gas transmission system expires in December 2024. Both sides have made it clear that they are not going to extend it.
At the same time, some EU countries remain dependent on Russian gas, such as Hungary, Slovakia, and Austria. These countries’ contracts with Gazprom provide for gas supplies through the Ukrainian gas transmission system. For example, Austria signed a contract for gas supplies until 2040.
After both Nord Stream and the Ukrainian GTS are shut down, Russia will be able to supply gas to Europe only through the Turkish Stream.
According to the Centre for Research on Energy and Clean Air (CREA), since the beginning of the full-scale Russian invasion, the European Union has bought 196 billion euros worth of energy from Russia.
