Russia’s Biggest Exports Could Soon Face Full Embargo in Europe: Report

The European Union is looking to end its reliance on Russia’s liquefied natural gas (LNG), with officials reportedly proposing to phase it out.

The EU is also considering cutting its purchases of aluminum from the country, and imposing further restrictions on Russia’s banks, oil tankers and military products, according to Bloomberg.

Leigh Hansson, sanctions partner at Reed Smith’s Global Regulatory Enforcement group, told Newsweek that if passed, the sanctions would have a significant impact on a range of Russia’s industries. Newsweek contacted the Russian foreign ministry and the EU for comment.

Why It matters

Russia’s natural gas industry has been hit hard by Vladimir Putin’s invasion of Ukraine, which prompted many European countries to turn to other suppliers.

Russian pipeline gas production has plummeted, with gas giant Gazprom posting losses last year and the ending of a gas transit deal with Ukraine. Moscow’s hopes that seaborne LNG will make up the shortfall face an obstacle if the EU phases out this form of the fuel.

What to know

Bloomberg’s report said that the EU was considering draft measures that would be part of the bloc’s 16th package of sanctions against Russia.

The measures would restrict aluminum imports, phase out LNG from Russia and target more of the country’s sanctions-busting “shadow fleet” of oil tankers.

The EU would also look to impose export controls on military goods and cut more banks from the SWIFT international payments system, according to Bloomberg, which cited people familiar with the proposals.

While many European countries have found other suppliers for pipeline gas from Russia, they have been more reluctant to curb LNG from the country amid concern of rising gas prices and new U.S.-led sanctions against the fuel’s production announced last week.

EU sanctions against Russian pipeline gas are not viable because countries such as Hungary and Slovakia still rely on supplies from Gazprom, the officials told Bloomberg.

Banning LNG is more feasible because the three biggest purchasers of the fuel—Spain, Belgium and France—are not expected to block the EU’s proposed measures against Russia, the outlet reported.

Hansson told Newsweek that considering Europe’s heavy reliance on LNG, such a ban could lead to higher energy prices and there will likely be further sanctions by the EU on Russian LNG tankers or third-country tankers that support illicit trade.

Regarding aluminum from Russia, the EU has imposed some restrictions on the import of products such as wire and tubing, but these represent a relatively small percentage of total aluminum imports into the bloc, Hansson said.

“Given aluminum’s critical role in industries like electric vehicle and aircraft manufacturing, we anticipate significant pushback from these sectors.”

What People Are Saying

Bloomberg reported: “Exiting LNG could be done either as a sanction or as part of a road map that the bloc’s executive arm is set to present next month,”

Hansson told Newsweek: “Considering Europe’s heavy reliance on LNG, such a ban could lead to increased energy prices.

“We would also expect that, if this legislation passes, there will likely be further sanctions by the EU on Russian LNG tankers or third-country tankers that support illicit trade.”

What Happens Next

Bloomberg said the draft proposals are still being discussed between EU members and could change before they’re formally presented, but the bloc aims to approve the package on February 24, the third anniversary of the war.

Any sanctions require unanimous approval from member states and are limited in time.