The European Union (EU) has adopted its 19th sanctions package against Russia, which includes significant measures aimed at curtailing Russian liquefied natural gas (LNG) imports. This new set of sanctions will prohibit imports of Russian LNG starting in January 2027 for long-term contracts and within six months for short-term contracts. In addition, the package imposes sanctions on over 100 vessels associated with Russia’s shadow fleet and targets entities in China and Hong Kong that support Russia’s energy trade.
Key Elements of the Sanctions Package
The sanctions package specifically places Rosneft and Gazpromneft under a full transaction ban. It also blacklists an additional 117 vessels, bringing the total number of sanctioned tankers to nearly 560. This extensive action reflects the EU’s commitment to disrupting Russia’s revenue streams derived from energy exports.
According to Kaja Kallas, the EU’s high representative for foreign affairs and security policy, “The 19th package will not be the last.” Her remarks underscore the EU’s ongoing strategy to tighten economic pressure on Russia. Meanwhile, Lars Lokke Rasmussen, the Foreign Minister of Denmark, which currently holds the rotating EU presidency, characterized these sanctions as a “decisive step towards stopping Russia’s biggest revenue source: oil and gas.”
The measures also extend to significant third-party operators that facilitate Russian energy trade. Two Chinese refineries and an oil trader identified as major buyers of Russian crude oil have been sanctioned, alongside third-country banks and cryptocurrency providers involved in the energy sector.
Debate and Impact on Energy Prices
The sanctions package, which took over a month to finalize, faced resistance from Slovakia, Hungary, and Austria. These countries expressed concerns about potential spikes in energy costs without access to Russian energy. This debate highlights the delicate balance the EU must maintain between political pressure on Russia and energy security for its member states.
The EU’s sanctions coincide with new measures from the United States. The U.S. Treasury Department has announced sanctions against Rosneft and Lukoil, two of Russia’s largest oil companies, aimed at undermining the Kremlin’s capacity to finance its military operations amid the ongoing conflict in Ukraine. The Treasury cited Russia’s lack of commitment to a peace process as the basis for these sanctions.
In response to the escalating sanctions, oil prices surged by 4% in early trading in Europe on Thursday. The combined impact of the EU and U.S. actions is expected to have a significant effect on the Russian economy, further complicating its energy export capabilities.
The continued imposition of sanctions illustrates the EU’s resolve in addressing the geopolitical ramifications of Russia’s actions and its commitment to supporting Ukraine. As the situation evolves, further actions may be anticipated, particularly as the EU aims to reduce its dependency on Russian energy resources in the long term.
