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Oil Moves Higher on Crude, Fuel Inventory Draw

Oil Moves Higher on Crude, Fuel Inventory Draw

Crude oil prices ticked higher…

EU to Ban Re-Export of Russian LNG

The European Union is set to ban the re-export of Russian LNG in the bloc’s waters in a first sanctions measure targeting Russia’s gas, EU diplomats told Reuters on Thursday.

The EU has been debating the 14th sanctions package against Russia over its invasion of Ukraine for a month, including proposals to ban LNG trans-shipments in EU waters and ways to address Russia’s shadow fleet of oil tankers.

“EU Ambassadors just agreed on a powerful and substantial 14th package of sanctions in reaction to the Russian aggression against Ukraine,” Belgium, which holds the rotating EU presidency, said on Thursday.

“This package provides new targeted measures and maximizes the impact of existing sanctions by closing loopholes,” the Belgian Presidency of the Council of the EU said.

European Commission President Ursula von der Leyen commented,

“This hard-hitting package will further deny Russia access to key technologies. It will strip Russia of further energy revenues. And tackle Putin’s shadow fleet and shadow banking network abroad.”

Trans-shipment of LNG within the EU has been a widespread practice so far, although the volumes don’t represent a large part of Russia’s LNG exports.

The EU, however, is stopping short of outright banning imports of Russian LNG, as it did with oil and oil products.  

The EU’s imports of LNG from Russia have jumped in the past two years since Russia cut off some EU countries from pipeline gas in the spring and summer of 2022, and the Nord Stream pipeline was blown up in September that year. Some of the LNG import terminals in Western Europe, including in Belgium, have been re-exporting to Spain and China.

An analysis by the Institute for Energy Economics & Financial Analysis (IEEFA) showed at the end of last year that around 21% of Russia’s LNG volumes bound for the European Union are transshipments, which are not included in official import figures and thus ignored by EU policymakers.

The EU’s 14th sanctions package also targets three Russian LNG projects and contains a clause allowing EU member states Sweden and Finland to cancel LNG contracts with Russia, diplomats told Reuters.

By Tsvetana Paraskova for Oilprice.com

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  • Steven Conn on June 20 2024 said:
    Another loudly proclaimed and ineffective package of sanctions likely bound to fail. The reason? All G7 & EU combined do not have enough economic, political, or military power to impose their will on the rest of the World.

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