EurOil: EU proposes sanctions on trans-shipment of Russian LNG

The EU is considering placing its first sanctions on Russian LNG, Reuters reported on May 7.

While the text is currently undergoing continued negotiations, passages seen by Reuters include a ban of the trans-shipment of Russian LNG and the prohibition of the utilisation of EU ports and locks for ships delivering goods contributing to Russia’s war machine.

The proposals under consideration would be part of the 14th sanctions package the bloc has imposed on Russia since its invasion of Ukraine in February 2022 as the EU seeks to weaken Russia’s ability to fund its ongoing war against its neighbour through trans-shipping Russian LNG to third countries with the use of EU ports.

The prosed sanctions would also ban EU involvement in future LNG projects based in Russia and also prohibit the use of EU finance and services to re-export Russian LNG as the bloc seeks to prevent the expansion of Russia’s LNG sector and disrupt its current business model.

However, a key caveat of the text is that the sanctions do not directly ban LNG imports from Russia to the EU but prevent bloc members from re-exporting Russian LNG after receiving it.

The text under discussion also includes penalties for EU companies that flaunt the sanctions and also calls for EU operators to share more widely information of Russia’s LNG imports.

It is believed the proposed sanctions would affect roughly one quarter of Moscow’s LNG revenue.

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