EU Imposes First Sanctions on Russian Gas in Latest Package Targeting Ukraine Conflict
EU Imposes First Sanctions on Russian Gas in Latest Package Targeting Ukraine Conflict

European Union countries have approved a new round of sanctions against Russia, marking the 14th package in response to its ongoing conflict in Ukraine. Notably, this package includes sanctions on Russian gas for the first time, according to diplomats on Thursday.

The sanctions prohibit the re-export of Russian liquefied natural gas (LNG) in EU waters. However, they do not go as far as banning imports, unlike the measures imposed in 2022 for Russian seaborne oil. Some EU nations still receive pipeline gas from Russia via Ukraine.

Experts in the gas market have suggested that these measures may have limited impact, as only about 10% of total Russian LNG exports are trans-shipped via EU ports to Asia.

In addition to targeting LNG re-exports, the package sanctions three Russian LNG projects. It also includes a provision allowing Sweden and Finland to cancel existing Russian LNG contracts, diplomats explained.

Belgium, currently holding the EU presidency until July 1, emphasized on social media platform X that the package "maximizes the impact of existing sanctions by closing loopholes."

European Commission President Ursula von der Leyen praised the measures, stating, "This hard-hitting package will further deny Russia access to key technologies. It will strip Russia of further energy revenues and tackle (President Vladimir) Putin's shadow fleet and shadow banking network abroad," on X.

The decision to implement these sanctions followed more than a month of debate among EU member states. One of the European Commission's proposals, aimed at preventing circumvention, was softened under pressure from Germany. Originally, the proposal would have required EU companies' subsidiaries in third countries to contractually prohibit re-exports of their goods to Russia. The EU is keen to stop the flow of dual-use technology, such as chips used in washing machines, that could be repurposed for military purposes by Russia.

According to an EU diplomat, Germany requested an impact assessment, leaving open the possibility that the measure could be reintroduced at a later date.

The package also tightens measures against what is known as Russia's "shadow fleet," which transports Russian oil outside the price cap set by the Group of Seven (G7) nations. EU countries have added tankers to the list of sanctioned entities, along with at least two Russian-owned ships involved in moving military equipment from North Korea, diplomats reported.

Since Russia's full-scale invasion of Ukraine in February 2022, Moscow and Pyongyang have strengthened their relationship. This week, the two countries agreed to provide immediate military assistance if either faces armed aggression, following a visit by Russian President Vladimir Putin to Pyongyang.

In total, the EU has added 47 new entities and 69 individuals to its sanctions list, bringing the total number of sanctioned entities to 2,200. The package is expected to be formally approved during a meeting of EU foreign ministers scheduled for Monday, diplomats confirmed.

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