The EU has decided to approve the 14th sanctions package against the Russia after the outbreak of the war in Ukraine and for the first time to enter the restrictions of Brussels there is also the gas. A historic decision by the Union which in fact sends a new signal and takes a new step in the sanctions process against the Kremlin, with Moscow increasingly put under pressure after the much more severe measures imposed on oil and coal. And Europe certainly doesn’t seem to want to stop, with a new package that could make the situation even worse for the country led by Putin. But what changes for the market?
Sanctions also on Russian gas
As mentioned, for the first time since the beginning of sanctions against Russia, gas has also been included in the latest package of restrictions. A historic decision, with a clear ban that translates into further losses for Moscow after the countless stops it has suffered in its business to avoid greater funding for the war.
After announcing the stop to Russian gas by the end of 2024, the EU has in fact decided to include this source of income for Russia in the 14th sanctions package, sending a clear message to Putin. Set of sanctions which, however, did not find everyone in agreement.
The Belgian rotating presidency of the EU, in fact, had to deal with the vetoes of some member states. Among these the usual Hungary of Orban, who for weeks opposed this new package, as done on all other occasions given the well-known energy dependence on Moscow. But also the Germany he had filibustered, surprising everyone. The Scholz government, in fact, initially opposed the clause that prevented foreign companies that purchased European goods, even for civilian use, from reselling them to Russia. According to Berlin, in fact, the damage caused to the businesses of the various national states would have been enormous and the chancellor had said he was ready to discuss “the most pragmatic approach possible”.
An approval which then arrived, with the German negotiations which led to the elimination of the clause. Then Hungary gave its approval only after obtaining guarantees on European intentions not to sanction the expansion of its Paks II nuclear power plant with Russian support.
What changes for the market after the sanctions
But what actually changes on the market after the approval of the 14th package of sanctions which also affects Russian gas? It should be emphasized that this is not a gas blockade at the borders, given that several countries are still largely dependent on supplies from Moscow.
The prohibitions will concern EU ports that they will not be able to resell Russian liquid natural gas (LNG) after its arrival in the EU, in addition to the blocking of financing for the Arctic and Baltic terminals planned by Russia. The measure affects a small percentage of gas imported from the EU, with Russian gas now reduced to 5%, which in absolute terms it is worth 8 billion euros. Not all of these, however, will be subject to sanctions, given that in case of use for national needs, importation is permitted.
Translated into numbers, therefore, the estimates say that this new package of sanctions will have an impact on a maximum of a quarter of the total gas, i.e. just 2 billion euros.
