EU Does Not Intend to “Sanction” Russian LNG
According to sources in Brussels, Russian exports of liquefied natural gas will also be excluded from the 13th package of anti-Russian sanctions, which the EU is set to approve on February 24, following Washington's decision to “block the issuance of new U.S. licenses for LNG exports”
Between January and July 2023, the Netherlands imported 0.8 billion cubic meters of liquefied natural gas (LNG) from Russia. Russian Ambassador to The Hague Vladimir Tarabrin said in an interview on February 5 that European countries continue to buy Russian LNG because the EU “has not imposed sanctions” on this type of fuel. “The Netherlands is not a leader in this area, but the statistics nevertheless contradict The Hague’s claims of decreasing dependence on Russian gas.”
Over the two-year period 2022-2023, Europe became the largest importer of Russian LNG: European countries imported 23.2 billion and 24.3 billion cubic meters of Russian LNG, respectively (preliminary data). Last year, European consumers paid €6.6 billion for Russian LNG. According to Moscow estimates, European companies re-export 20% of LNG imported from Russia, applying higher prices than those set by Russian exporters.
Following the recent decision by President Joe Biden’s administration to “suspend the issuance of new liquefied natural gas export licenses for climate reasons,” European importers fear that the U.S. will leave Europe without this precious fuel. “The U.S. decision could have a number of negative consequences for Germany’s energy security and Europe as a whole, most notably higher prices,” Germany’s largest trader Uniper wrote in a statement.
In Asia, Japan is one of the main importers of Russian LNG. In 2023, the country imported 8.7 billion cubic meters of “made in Russia” liquefied natural gas, 10.7% less than in 2022. In parallel with the reduction in gas imports, the Japanese government decided to further tighten the sanctions imposed by the G7 at the end of 2022 on Russian oil exports under the so-called “price ceiling.” Japan’s Finance Ministry said the new measures will take effect starting February 20, 2024 and will impose “additional burdens on companies that transport Russian oil or insure their cargoes.” According to a Japanese government statement, “price caps must be observed from the moment of loading,” while Japanese authorities will require companies that do not comply with the $60 per barrel price ceiling on Russian crude to “report details of export, transportation, and insurance costs.”