EU seeks agreement on new sanctions package, Greece blocks ban on Russian LNG

The European Commission is looking for a way to complete approval of the 21st sanctions package against Russia before the summer recess, Brussels-based Politico reported. Greece is now standing in the way, warning that the proposed ban on transporting Russian liquefied natural gas (LNG) would have a devastating impact on its shipping industry. The aim is to approve the entire package of restrictions by this Wednesday.

The European Commission is preparing an analysis of the economic impact of an LNG transport ban and plans to present it at Tuesday’s meeting of diplomats from EU member states. The findings are expected to serve as a basis for Wednesday’s meeting of the countries’ ambassadors to the EU (Coreper), which diplomatic sources say will be decisive for the fate of the entire sanctions package.

The aim is to demonstrate that a ban on transporting LNG would cause greater economic harm to Russia than to Greece, and that the ban could not easily be circumvented by energy transport operators reflagging their vessels to countries outside the European Union.

Greece is one of the world’s largest maritime powers. Greek shipowners own around a fifth of the global merchant fleet and are particularly strong in tanker shipping, including liquefied natural gas (LNG) tankers. There are concerns that a ban on EU vessels transporting Russian LNG would mean, first, that Greek ships would lose lucrative contracts and, second, that Russia would find tankers from other countries (such as the United Arab Emirates, China or India), allowing it to continue exporting gas while Greek shipping companies bear most of the economic losses.

According to Politico, one last-resort option would be for the EU to grant Greece an exemption from the ban. “We are trying to find a way out of this situation, but the dispute with Greece shows that we are starting to run up against significant economic interests in member states,” the Brussels-based outlet quoted one diplomat as saying.

Many member states, however, oppose any exemptions. Among other things, they argue that many countries have already felt the economic consequences of severing trade ties with Russia and were not granted any exemptions. Germany, for example, imported more than half of its natural gas from Russia before 2022. “Granting Greece an exemption would send the wrong signal,” another diplomatic source said.