Another Russian sanctions package has landed — complete with enough carve-outs to keep Russian liquefied natural gas flowing.
Following a month-long deadlock, the European Union reached a final agreement on the 21st sanctions package on Thursday morning. But it did so only after conceding to Greece’s demand to allow its shipping sector to continue transporting Russian LNG to non-EU countries even after the EU’s import ban takes effect in 2027.
The exemption effectively enables Moscow to keep profiting from LNG sales to global markets with the help of European shipowners.
For months, we’ve reported on how European companies provide Moscow with the fleet of specialized ice-class tankers that is critical to Russia’s Arctic LNG exports. Greek company Dynagas — which manages 11 such vessels — sits at the center of that debate.
The EU’s ability to cripple Russia's LNG sector hinges on whether Moscow can retain access to the ice-class fleet to transport gas to Asia once the EU market closes. Greek-linked vessels alone have transported around €23 billion worth of Russian LNG since the full-scale invasion began, according to the Centre for Research on Energy and Clean Air.
“Sadly, the last round of sanctions set a very bad example of how the interests of one private company could be prioritized not just against EU values but against EU interest to make Ukraine win,” said one EU diplomat. “Every caveat out of sanctions means helping Russia to continue aggression and to grow muscles for further attacks.”
The European Commission argued that banning EU ship management companies from transporting Russian LNG would simply hand full operational control of the vessels to their Chinese owners. That means the ships would continue transporting the gas regardless, but outside EU oversight. Meanwhile, the urgency of extending the oil price cap, set to expire this month, gave member states additional leverage to demand concessions.
Sanctions campaigners said the compromise will allow a key pillar of Russia’s war economy to continue operating at full steam — while European companies keep benefitting.
“It is shocking that the EU has granted this unnecessary carve-out to protect one shipping company’s business interests,” said Isaac Levi, a Europe-Russia policy and energy analyst at CREA. “Europe’s collective security and support for Ukraine should come before the profits of a powerful billionaire.”
The package nevertheless marks progress in other areas. The EU expanded sanctions to cover additional Russian-linked banks and refineries, introduced new trade restrictions on dual-use goods and banned the sale of tankers to Russian-linked entities. Bulgaria and Austria also secured concessions, shielding the head of the Russian Orthodox Church, Patriarch Kirill, and Austrian-controlled Reifaisen Bank — which still operates in Russia — from the sanctions.
At the end of the day, the exemption for Greece’s Dynagas signals more than just a concession to one company. It shows that even a relatively small member state can force the EU to temper its foreign policy objectives when domestic economic interests are at stake.
Federica Di Sario contributed to this newsletter.
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