Deferred EU Ban On Transshipment of Russian LNG In Force Today

An EU ban on transshipment of Russian liquefied gas (LNG) in ports introduced in June 2024, with a deferral granted until March 26, 2025, has finally come into force. The sanctions also prohibit EU countries from providing technical support, brokerage services, and financing for transshipment operations. Similar to previous sanctions, the import ban is intended to disrupt Putin’s ability to continue financing his war in Ukraine. Although Russian LNG accounted for just 5% of the bloc’s energy consumption in 2023, it still netted the Kremlin ~$8 billion in revenues.

“If they can't transship in Europe, they might have to take their ice-class tankers on longer journeys,” Laura Page, a gas expert at the Kpler data analytics firm, told Politico, adding that Russia “may not be able to get out as many loadings from Yamal because their vessels can’t get back as quickly.”

Europe has cut Russian gas imports dramatically, with imports of Russian gas declining from about 450 million cubic meters per day (mcm/d) at the end of 2021 to about 150 mcm/d currently. Norway and the U.S. have replaced Russia as Europe’s biggest gas supplier: In 2023, Norway supplied 87.8 bcm (billion cubic meters) of gas to Europe, good for 30.3% of total imports while the U.S. supplied 56.2 bcm, accounting for 19.4% of total.

However, there are talks about a potential return of more Russian gas to European markets, including during the latest London’s International Energy (IE) week. The Financial Times has reported about a plan by the former head of Nord Stream 2’s parent company to start up Nord Stream 2 with U.S. businesses buying the pipeline so as to act as middlemen between Russia and European consumers in the hope that would make flows seem more reliable. However, StanChart has pointed out that such a plan would need approvals from multiple jurisdictions, with the injection of U.S. interests not necessarily improving the reliability and supply security of Russian flows.

By Alex Kimani for Oilprice.com

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