Yves here. This headline warrants a big “BWAHAHA”. Sure, operationally Europe has been reorganizing its affairs so as not to use Russian energy and may eventually get there. But there’s no admission whatsoever in the official prattle that OilPrice has picked up of the huge cost to European businesses and societies of permanently higher energy costs, and how the self-sabotaging sanctions have worked out to the perp, the US’ advantage, by creating considerably more demand for higher-cost, less certain LNG supplies.
By Felicity Bradstock, a freelance writer specialising in Energy and Finance. Originally published at OilPrice
- The EU has proposed a legally binding ban on Russian gas and LNG imports by 2027.
- Europe has significantly reduced its reliance on Russian energy since 2022, boosting energy security.
- The European Parliament may push for an earlier ban and stricter rules, as debate continues.
Since the Russian invasion of Ukraine in February 2022, the European Union has been working to decrease its dependence on Russian energy. The EU responded to Russia’s invasion by introducing sanctions on a range of energy products, including oil and gas, which it has gradually strengthened over the last three years as the region has reduced its reliance on Russian energy. Now, the EU and several energy experts believe that Europe will not need to go back to using Russian gas in the future, having successfully strengthened and diversified its energy supply chains.
In June, the European Commission (EC) proposed a legally binding ban on EU imports of Russian gas and liquefied natural gas (LNG) by the end of 2027. If passed, this would bring a decades-old energy trade relationship to an end. The EC included legal measures in the proposal that ensure that EU members that continue to rely on Russia, such as Hungary and Slovakia, cannot block the plan. However, the aim is to get the support of all EU members, perhaps even if that means providing financial incentives for moving away from Russian energy.
The EU energy commissioner, Dan Jørgensen, said that the bloc did not introduce the proposal to phase out Russian gas imports solely because Russia invaded Ukraine. “This is a ban that we introduce because Russia has weaponised energy against us, because Russia has blackmailed member states in the EU, and therefore they are not a trading partner that can be trusted,” Jørgensen said. “That also means that, irrespective of whether there is a peace or not, which we all hope there will be, of course, this ban will still stand.”
The proposal includes the ban of gas imports from any Russian pipeline gas and LNG contracts signed during the rest of 2025, starting January 1, 2026. Imports under short-term Russian gas deals signed before June 17, 2025, which last less than one year, would be banned from June 17 next year. In addition, imports under existing long-term Russian contracts would be banned from January 1, 2028. Hungary and Slovakia would have until January 1, 2028, to diversify their gas imports away from Russia before a ban is implemented under the plan.
If implemented, the plan would bring an end to LNG contracts held between Russia and several oil majors, including France’s TotalEnergies and Spain’s Naturgy. A ban would also eventually be imposed on EU LNG terminals providing services to Russian customers. Meanwhile, companies importing Russian gas would be required to disclose informationon their contracts to the EU and national authorities.
At the beginning of July, the European Parliament’s chief negotiator, Ville Niinistö, said the EU should consider introducing a ban on Russian gas imports a year earlier, in 2026. Niinistö said, “We would be interested in looking at a 2026 deadline.” He added, “The Parliament’s role here is to scrutinise the proposal and make sure that it’s as rigid as possible… Legally speaking, we are going to check … [whether] those timetables are strict enough or can they be hastened.”
Niinistö stressed that the proposal should include Russian oil in the ban, as well as gas. “We are also interested in … [the] potential possibility of including oil more strictly in the legal language as well,” with a phaseout date of 2027 “at a minimum,” he said. Niinistö also said he would be assessing the legal position of the proposal “to make sure that there are no undue legal consequences for European companies” from Russia. Before it can become law, he must establish a proposal that aligns with the expectations of the European Parliament’s various political groups. To achieve this by “early fall”, he will talk “with everyone,” including Russia-friendly far-right and far-left lawmakers.
Since imposing sanctions in 2022, the EU has reduced its gas supplies from Russian pipelines by approximately two-thirds. It has also banned the import of seaborne coal and oil. However, the region continues to rely on Russia for large volumes of LNG. Some powers are also requesting that the EU ease sanctions on Russian energy in the face of rising consumer prices, as Moscow is offering lower-priced crude and gas than its competitors.
However, the CEO of TotalEnergies, Patrick Pouyanné, stated in July that Europe’s improved energy resilience means it can successfully ban the import of Russian gas. “We’ll be able to ensure the security of supply of Europe without Russian LNG in 2028”, thanks to new capacities under construction in the United States and Qatar, said Pouyanné.
It is not yet certain whether the EU will adopt a legally binding ban on EU imports of Russian gas and LNG. However, the bloc’s proposal has highlighted just how much Europe has reduced its reliance on Russia for energy. The diversification of the EU’s energy trade has helped boost the region’s energy security, as well as encouraged several countries to accelerate the development of their renewable energy capacity.
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Truly, the EU is run by people who have lost contact with the physical world. Natch, I’m thinking of Ursula von der Leyen and her war on wolves, as well as Kaja Kallas and her inability to understand that a rabid Estonia is going to be defeated by its geography or the addled Finn Niinistö above who thinks that LNG is somehow a more viable way of transporting fossil fuels than a pipeline.
And there’s this: “This is a ban that we introduce because Russia has weaponised energy against us, because Russia has blackmailed member states in the EU, and therefore they are not a trading partner that can be trusted,” Jørgensen said. “That also means that, irrespective of whether there is a peace or not, which we all hope there will be, of course, this ban will still stand.”
Weaponized energy? Blackmailed? Untrustworthy? Hey, Jorgensen, is that Russia — or Trumplandia? Are we talking Gazprom or Chevron?
Yet one of the remarkable things about the article is this: We sometimes discuss decadent capitalism or “late-stage” capitalism here in the comments. Yet Yves Smith and Lambert Strether always caution against the use of terms like late-stage, terminal, collapsing. What this article is about is capitalism (which now means mainly big businesses and war profiteers shoveling money in and out of globalized banks) reinventing itself once again. It used to be that U.S. capitalists diddle around in banana republics like Honduras. Now they plan to diddle around with France — and, yes, Finland and Estonia, where Lutheranism seems to have taught the elites that they can get by on Salvation by Capitalism Alone.
Yes, but don’t you find their stupidity so inspiring in a world of rational economic actors interested only in maximising their own economic welfare? Europe is almost Dostoevskian – Christ-like, even – in its willingness to sacrifice the wellbeing of its people, commit economic suicide, and prepare the way for it’s downfall by following a singular path of totally irrational virtue signalling.
I think, being fair, you’ve got to admire any set of fragile rulemaking institutions whose leaders find they have to cheat and lie and steal and break any rule to get their own way, however irrational, knowing that it is doomed to failure from the off, less Götterdämmerung and more like a mutual suicide pact between spaced out teens who suddenly choose to hold hands as they jump off a fifty storey building in the belief that it will enable them to fly.
Leaving aside the stupidity here other than Europe will you find this kind of don’t care courage?
The system they are building is such that no dissent will be allowed. I am looking for the slow and then fast collapse of the social security fabric in Europe, with all the fat melting away in the hands of US energy and military companies and then when the knife hits the muscle and the bone, everything will be already too militarized in Europe that mass protests will not have much success. And it will be Russia’s fault anyways…
And I said nothing about climate and its waves of drought and heat…
It couldn’t happen with nicer people…
To the Western rulers, “1984” is a manual.
This one never gets old:
GAS GAS GAS
https://clips.twitch.tv/DaintyBrightButterflyTBTacoRight-5WNClHE73At-SWnZ
LOL, I remember watching that live. Only one burning means that he went outside. When he was home, all four were on. :)
I rather suspect the over-confidence that Europe will not need Russian gas is related to overconfidence about arranging events in West Asia.
Gas fields in the Eastern Mediterranean basin between Cyprus and Libya and the Levantine coast are the scene of much manoeuvring. Israel wants to sell gas from offshore Gaza. Turkey wants a transit role for this gas to its south and also for the gas to its east, in the Caspian and the ‘Stans, and to its south-east, in Iran and Iraq and Saudi Arabia and the Gulf States.
Cutting off easy and reliable Russian supplies to depend more on this geopolitical tinderbox is insane….
Thank you and well said, R.
One wonders if some of the source of this overconfidence is the increasing engagement of the Blair organisation, funded by big oil, autocrats and zionists, in Europe.
The bilateral / trilateral rapprochement between Blighty and some EU member states over defence, is in part encouraged and engineered by Blair. It’s also part of the jockeying for position post-Ukraine.
Blair is good at spotting waves to surf. He’s also good at planting stories, think pieces etc. in the MSM, so that it feels like he has an insight and to facilitate business for him and his family, especially the elder sons.
Blair has Sanne Marin on the books. I reckon he would like a few more of that ilk. It’s easier to hawk using them.
They might as well just paint a giant bullseye on the decks of the offshore rigs outside Gaza.
Just aim for the H
If Western Europe have any brains at all they would vote to withdraw from the EU and its ridicules economic and military policies.
Western Europe involves some 30+ nation states. Several are not member states of the EU but most are in NATO.
The UK is no longer in the EU and that has been massively damaging to UK trade, (ONS estimates £80-100bn pa.) and immigration policies, because of the right wing Brexit settlement – which unnecessarily abandoned trade harmonisation and removed freedom of movement.
This is despite the EU being restrictively neoliberal and increasingly headed towards further disastrous financialisation of national economies.
The Eurozone one size fits all has inevitable and intractable problems, but arguably the USA is heading more rapidly towards a major collapse.
The EU was never intended to be a defence consortium and is not the main practical organisation that co-ordinates Western European defence – that is more down to NATO plus the Common Security and Defence Policy (EEAS) which is mostly a wish list.
It is 47 who is presently trying to dictate European defence policy.
Thank you and well said, Tipi.
The Commission has long sought a defence and security policy role for itself. This goes back to the 1990s.
One hopes Aurelien pipes up about that encroachment on what are legally and politically felt to be matters for member states, not the union. There is resistance from the member states, not just because of the unilateral actions of von der Leyen and Kallas.
One question – isn’t this unilateral unification by the EC under the direction of NATO needs for a unified military? The political side has the flavor of opportunism (get US dollars), and isn’t the military is the easiest way to get them?
One would assume creating a military without a country–especially the command and logistics structure, woild be a nightmarish task–esp because of politics.
The current NATO sidesteps this by relying on the US on the “big” stuff and the member states staying more or less local. If there is to be a command structure that sidesteps national sovereignty, Even if it is not very probable now, the idea of a German commanding Polish troops to invade, say, Czechia for defying Brussels’ dictates probably reminds people of not so happy things of yesteryear (1968, ahem)…
One result of the US sanctions on Russian energy is the swing of US from a modest net importer of hydrocarbon to a 2 to 3 million barrel equivalent net exporter.
The swing is LNG.
To open more facilities to freeze, store and load LNG requires more production, fracking?, and high NG prices in the world.
Graham and Blumenthal want more supply limits!
Self fulfilling: limit supply, raise prices!
The constant repletion of the word “dependence” as in the phrase, “the European Union has been working to decrease its dependence on Russian energy” strikes me as dubious, especially when it is admitted that Russia has been a reliable source of energy for decades.
It’s never mentioned that the West thinks Russia might be “dependent” on Euros and Dollars and this has been part of the economic strategy, together with sanctions and support for Ukraine, to weaken and downsize Russia, and make it vulnerable to regime change. The strategy has backfired, however, the EU elites are not willing to concede that fact and they would rather double down on their ridiculous so-called energy plan.
In addition, western values are at stake. The US and Israel have violated international law, supported terrorists, and bombed, invaded, or regime changed nearly every country in West Asia. Yet, compared to our ally, the oppressive Saudi Arabia, Russia looks like peace, love, and democracy forever.
Moreover, there is the ongoing genocide and apartheid in Palestine, fully supported by the US, while the EU basically stands aside. That the EU should think Russia is the bigger threat to Western values is hardly rational.
The main beneficiary seems to be Qatar, who own much of the supply chain, including the European LNG terminals, with the usual US oil multinationals like ExxonMobil who partner those Qatari interests, for example at South Hook in Milford Haven, which is the largest LNG terminal in Europe,
Such is global corporate capitalism, whose interests still dominate energy policies plus resultant energy supplies, regardless of national and supra national political administration, and despite international net zero commitments.
The idea that Russian oligarchical interests don’t dovetail with other corporate and Middle Eastern national concerns, and that these trump western values is optimistic.
They keep it quiet, but probably the biggest winner from an increased dependence on LNG is Japan – Japanese companies dominate the financing of the overall LNG supply chain, including much of Qatar’s investment.
But overall, the ‘benefits’ of this goes to the entire energy supply industry, which is gaining from overall higher prices in Europe at the expense of industry and consumers. Solar, nuclear, wind, etc., are all very profitable right now – the main fly in their ointment right now is relatively high capital costs which is forcing a reconsideration of a number of major projects, especially in off-shore wind.
An unspoken element of Europe’s strategy is that the short term pain of this will drive much higher productivity in industry as companies are forced to invest in the cutting edge of energy saving and the electrification of large portions of industry. A sort of ‘what doesn’t kill you will make you stronger’ approach, which in the current world market looks somewhat optimistic to put it mildly. But that said, traditionally European companies have always benefited from projections for higher energy prices, as everything from European cars and trucks to industrial plant and home heating tends to be more efficient than most alternatives on the market.
An overlooked aspect of the EU’s policy is that much of current strategy is not new – EU strategy for at least 2 decades has been to significantly reduce natural gas usage (although Germany has always been going its own way for domestic reasons). The current REPowerEU plan (the official long term plan for energy) is simply a revision and uprating of pre-existing policies. I suspect many insiders actually see this as an opportunity to push existing policies more aggressively as there has always been a long term internal battle between the pro-natural gas and pro-renewable/nuclear lobbies within and outside the corridors of Brussels. And of course EU policy as a whole is, of necessity, somewhat light touch as every individual member state has its own energy priorities.
What is the impact on this push for electrification in EU of the fact that China is the incontestable leader in EVs, batteries, solar power, and wind?
Its generally very positive, as its pushing prices very low, especially for solar panels and to some degree batteries, although grid scale batteries are still generally not sourced from China in my experience. As both grid scale batteries and solar farms tend to be supplied as integrated packages by intermediaries, the Chinese proportion is not always clear from the available figures. Chinese companies have very little presence in electrical infrastructure provision in Europe, although obviously a lot of individual componentry will be China sourced.
Chinese EV’s are still not penetrating European markets to a significant degree, with only one of the top 25 sellers this year being a Chinese brand (although many of the key parts – plus I believe some VW’s and Teslas – are Chinese sourced). Chinese wind turbine manufacturers are not particularly prominent in European markets – the top 5 suppliers are Vestas, GE, Siemens, Norcom and Enercon.
I think you’re taking this someplace else. The statement that Europe was too dependent on Russian energy makes little sense to me. Imho, I think the EU was threatened by the US to stop giving Russia its Euros and/or dollars for Russian energy despite the damage to the EU economy.
The US, possibly with help from the UK, blew up Nordstream; not a simple task. If you can blow up Nordstream, you can blow up any other above ground pipeline too. The EU elites lined up and adopted the slogan about Russia’s unprovoked aggression, committed themselves to sanctions on Russia, defending Ukraine, etc. The plan hasn’t worked out well.
I would like just one example where Russia “blackmailed” EU state over oil/gas supplies and demanded something other than money.
The fact that EU can plan to cut off Russia supplies three years into the future with the explicitly stated aim to cripple Russia and they expect Russia to be fully onboard with their timeline and fulfill their contracts to minimize all inconveniences to EU, would IMHO strongly suggest Russia is in fact the most dependable supplier imaginable. I wonder what would for example USA/Trump do, if EU announced they have three years plan to cut-off USA from their market and join with China. Surely he would gladly send all the gas and AI chips with no additional tariffs, nor demanded 5 % GDP as NATO tribute, patiently waiting for EU to enact their big beautiful plan.
“strongly suggest Russia is in fact the most dependable supplier imaginable”
Problem: mass media. It is not being reported. NOTHING is being reported. It´s depressing…
And energy markets and traders traditionally have been very guarded and a black box for 99% of the public.
And above all the news editors responsible for news choices are uninformed to an embarrassing degree.
Not knowing meets not wanting to know.
Those newspaper articles that contain some truth on energy markets burry it so deep it´s hard to find and to in fact understand it. There is a specialist with BERLINER ZEITUNG. Whenever I read her articles I feel as if she is intentionally trying to create unintelligible and overcomplicated phrases and text structure so as to make it hard to see the obvious.
With meeting people of my age and younger who make up the backbone of the intellectual class now I am getting more and more desperate. I mostly am saying “sorry I don´t talk about politics any more” or “with my views stated in open public I would end up with a prison sentence.”
The very fact that they know they are privileged (they do come from non-acedmic families too) already creates an overconfident mindset.
p.s. It strikes me as tragic that especially East European immigrants and descendants from before 1990 are among the best propagandists of Capitalist ideology and enforcers of anti-Russian policies with the confidence, implicitness – and calm – of a Catholic bishop.
They are true believers armed with rulers and a calculator. Thinking of the truly dangerous dog which is the one that never barks…
Thanks AG, I can confirm your desperation wholeheartedly: “With meeting people of my age and younger who make up the backbone of the intellectual class now I am getting more and more desperate.” These people (most of them with some university certificate) think of themselves as educated, enlighted and part of the political left and look down on the populistic plebs. But in fact they are neither educated nor enlighted or politically left – that is the reason why they are shy discussing controversial political, historical or economical topics; whenever there is someone challenging their opinion on xyz with good arguments they scream “hate is no legitimate opinion”. It is a very dangerous postmodern sect which has our societies in a chokehold. They are the people guys like Christopher Lasch warned us about.
I can’t think of the use of Russian oil to blackmail EU state unless reminding a buyer that a bill is outstanding can be construed as blackmail. The only possible instances are when the Ukraine was stealing gas in transit across its territory and gas restrictions were placed on Ukraine when EU gas stocks were high and the Ukraine has never been a part of the EU. But, hey, who cares about facts when you’ve got stupidos like Jørgensen who have concocted a cretinous grand narrative incapable of realising it will lead the to the very gates of WW3?
The fact that he is saying it is automatically makes it true…
Just imagine if Trump gets to put 200% tariffs on any country dealing with Russian oil – and gas I assume – and this includes China, India and Turkiye. And as a consequence those countries could no longer receive it from Russia to re-export it to the EU after refining it of it’s russianess. Then overnight the EU would get their wish to have no Russian energy coming into their block at all and the economy of the EU would suddenly be running on empty. Can you imagine?
It’s amazing how virulent the Russophobia was just below the surface waiting to be revealed.
“….to accelerate the development of their renewable energy capacity.” Yay, we can all be like Spain!!