Business · Energy & Commodities · 17 hrs ago
EU gas sanctions leave Europe short as Russia resells LNG at higher prices
The EU plans to stop importing Russian LNG from 2027 under sanctions adopted in January.
The decision affects European buyers, including France’s Total and Spain’s Naturgy, which have long-term contracts with Russia’s Yamal LNG plant.
Those contracts set prices at 25 to 27 euros per megawatt-hour, about a quarter of current market prices.
With European buyers barred from taking the gas, Russia can resell it to Asian countries at much higher prices.
War in Iran has reduced global gas supply, while Europe’s storage levels are the lowest for this point in the year since 2013.
That leaves Europe more exposed if the coming winter is colder than expected, and could mean consumers face higher-cost gas from other suppliers.
The EU says the sanctions will reduce its dependence on Russia over time, but the sources give no further steps or timeline beyond the planned 2027 ban.
EU sanctions bar European buyers from importing Russian liquefied natural gas from 2027, while existing contracts had offered gas at prices far below current market levels.
The article says Russia can resell the gas to Asian buyers at about four times the contracted price.
Europe is giving up more than 200 Russian gas cargoes, about 15% of its total imports, as global supply has fallen by a fifth.
European gas storage is heading into the 2026-2027 winter at its lowest level since 2013, according to the International Energy Agency.
The article says European importers, including Total and Naturgy, have not received an exemption to bring contracted gas to Europe.
- Who
- The European Union and Russian gas producer Yamal LNG, operated by Novatek.
- What
- EU sanctions prevent European buyers from importing Russian LNG from 2027; Russia can resell the gas to other buyers at higher prices.
- When
- The EU adopted the new sanction on January 26; the import ban takes effect in 2027.
- Where
- Europe, with the gas available for resale to buyers in Asian countries.
- Why
- The EU adopted the measure to punish Russia over its war in Ukraine and reduce Europe’s dependence on Russian gas.
This story does not have two clearly opposing sides.
European importers signed long-term contracts with Yamal LNG at €25-27 per megawatt-hour.
The EU adopted a new sanction barring European purchases of Russian LNG from 2027.
The war in Iran began, while global gas supply had lost a fifth of its volume.
European gas storage is expected to enter winter at its lowest level since 2013.
The EU ban on buying Russian LNG is due to take effect.
- EU ban
- Russian LNG imports prohibited from 2027
- Cargoes forgone
- More than 200, equal to about 15% of EU imports
- Yamal LNG contract price
- €25-27 per megawatt-hour
- Resale price
- About four times the contracted price
- European gas reserves
- Lowest level since 2013 heading into winter 2026-2027
- Contracted importers
- Total and Naturgy