1/15/2025–|Last updated: 1/15/202504:43 PM (Mecca time)
The European Union is considering imposing restrictions on the import of aluminum from Russia, and phasing out imports of liquefied natural gas from it as part of a new package of sanctions targeting Moscow after the outbreak of war with Ukraine, according to Bloomberg, citing unnamed informed sources.
Draft sanctions
The draft measures, which will be part of the bloc’s 16th package of sanctions, include restrictions on dozens of additional ships that form part of Russia’s fleet of tankers transporting Russian oil and additional export controls on goods used for military purposes.
This package may include, according to sources, the separation of more banks from the international payments system (SWIFT).
According to the same sources, the restrictions imposed on aluminum will be gradual with the time frame and scope determined, but they indicated that dispensing with Russian natural gas imports could be done either as a penalty or part of a road map scheduled to be presented by the bloc’s executive arm next month.
Russian liquefied natural gas remains one of the last major energy sources that Europe relies on, after Moscow significantly reduced pipeline flows.
The European Union imported record quantities of Russian liquefied gas last year. So far, European politicians have stayed away from imposing tougher restrictions on LNG to avoid the price shocks that have hurt the region’s industries in recent years. But from 2026 to 2027, new supply of facilities being built in the United States and Qatar is set to push down prices, according to Bloomberg.
The initial proposals are still under discussion among member states, and may change before they are formally presented.
While several countries have urged a ban on Russian gas imports, the EU still needs to decide whether it should rely on sanctions to make them legally binding, regulations as part of a roadmap, or a combination of the two, according to officials and diplomats familiar with the discussions.
Sanctions may provide the strongest argument for terminating contracts with Russian suppliers, but they require unanimous approval from member states and are limited in time, according to Bloomberg.
Display shifts
European governments, previously reluctant to give up Russian LNG, are watching with concern rising gas prices due to cold weather and new US sanctions on Russian energy.
Commodity strategists at ING, led by Warren Patterson, said in a note that the ban “is likely to only add to the supply uncertainty for the European market, which may provide some support to prices. In 2024, about 18% of EU LNG imports from Russia.
However, the impact of the EU proposals on prices was minimal on Wednesday, and it is also unclear how quickly LNG and aluminum imports will be phased out.
Aluminum saw little change at $2,563 per ton on the London Metal Exchange in morning trading, while other metals declined.
Major buyers
Some officials have said that imposing sanctions on Russian gas – via pipelines – is not feasible because a group of countries including Hungary and Slovakia still depend on supplies from Gazprom.
But they point out that an LNG ban is more feasible because the three countries that bring in the largest share of the fuel (Spain, Belgium and France) are not expected to block punitive measures against Russia.
The European Union is also considering proposals to list more companies in third countries, which would help Moscow get its hands on technologies used in weapons, as well as restrictions on the Russian transport sector.
Separately, the European Union aims to close more loopholes that allow Moscow to evade existing restrictions as well as impose higher tariffs on agricultural goods and fertilizers in parallel with a new sanctions package.
The European Union aims to adopt the new package of measures – next month – on the third anniversary of the outbreak of war in Ukraine.
