EU Nears 21st Sanctions Package Against Russia – Main Hurdle Is Russian LNG Transport

The European Union is on the verge of finalizing its 21st sanctions package against Russia, with the last remaining obstacle being restrictions on the transportation of Russian liquefied natural gas (LNG) to third countries, according to an analysis published by Ukrainska Pravda.

The package focuses on energy, financial services, cryptocurrencies, and trade. It expands the blacklist of vessels in Russia’s shadow fleet, targets dozens of banks and crypto firms in third countries that help Moscow evade restrictions, and curbs exports of chemicals and components for Russia’s military-industrial complex.

The most contentious measure is a proposal to ban LNG shipments from Russia to third countries. Greece, home to a large tanker fleet, is pressing for exemptions or transition periods. This stance has frustrated other member states, some of which had to close plants or enforce stricter rules themselves.

Negotiators are considering a compromise: allowing LNG transport if a tripartite contract was signed before 2022, and freezing the oil price cap for six months.

Sanctions are already taking a toll on the Russian economy. GDP growth has slowed from 5.9% in 2021 to around 1% today. The budget has swung from a $7 billion surplus to a $68 billion deficit. The liquid part of Russia’s National Welfare Fund has shrunk by 63%. Oil export losses have exceeded $195 billion. Moreover, Russia’s Finance Ministry has failed to auction federal loan bonds for four consecutive weeks as investors refuse to lend.

Work on the 22nd sanctions package has already begun, targeting further restrictions on electronics components through third countries, stronger secondary sanctions, and a complete closure of the EU market to Russian energy.