Simon Watkins
Feb 24, 2025
anything, as in three or four months of tightening sanctions and minimal military gains in Ukraine he’d have got nothing at all,” a senior source who works closely with the European Union’s (E.U.) energy security complex exclusively told OilPrice.com last week. “Trump may give him [Putin] a lot more than nothing so he can keep his promise to the voters back home to end the [Russia-Ukraine] War quickly, but it doesn’t mean we [Europe] have to go along with it, nor Ukraine itself, particularly given the trouble involved in reducing Russia energy supplies in the first place,” he added.
Indeed, before the 2022 invasion, cheap and abundant oil and gas from Russia had been a key factor in the economic growth of many E.U. countries, most notably its de facto leader Germany. These energy supplies (and the effective devaluation of its prevailing currency when the then-mighty Deutschemark was replaced by the feeble Euro) turbocharged its growth for over two decades, so it was little wonder that Berlin was extremely unwilling to give them up. This was the primary reason why Russia’s test-run invasions of independent European sovereign countries Georgia in 2008 and Ukraine in 2014 were met with such an
impotent political, financial and military response from the E.U. at the times. And this pathetic reaction was a key reason why Putin felt so confident that the same would happen with a full-scale invasion of Ukraine that his armies rolled into the country on 24 February 2022, as fully detailed in my latest book on the new global oil market order. His calculations were almost right, with the early days of the invasion being marked in the E.U. not by furious and fierce rhetoric and actions but by whingeing concerns over how its member states could keep Russian oil and gas rolling into their refineries, despite clear knowledge that the proceeds would be used by the Moscow to fund murder in Ukraine. Following the 31 March 2022 decree signed by President Vladimir Putin that required E.U. buyers to pay in roubles for Russian gas via a new currency conversion mechanism or risk having supplies suspended, an official guidance document was sent out to all 27 E.U. member countries on 21 April by its executive branch, the European Commission (E.C.). It said: “It appears possible that E.U. companies can ask their Russian counterparts to fulfil their contractual obligations in the same manner as before the adoption of the decree, i.e. by depositing the due amount in euros or dollars.” The E.C. added that existing E.U. sanctions against Russia also did not prohibit engagement with Russia’s Gazprom or
Gazprombank beyond the refinancing prohibitions relating to the bank. It was only because Russia’s invasion was not completed in the anticipated seven days that the E.U.’s planned capitulation did not go ahead. Instead, the extra time gave the U.S., U.K. and France time to formulate a broad strategy that would allow the relevant E.U. member countries to see their Russian oil and gas supplies replaced from other sources, as also detailed in my latest book.
From then until now, companies from the U.S. and Europe – especially the U.K., France and Italy – have worked hard to build a network of new oil and gas supply sources stretching from the U.S.
itself through the Middle East (notably Qatar) to North Africa (especially Egypt). Big new supply deals have also been signed in other geopolitically vital energy-rich countries as well, including Iraq, Libya, and Saudi Arabia, by such firms as the U.S.’s ExxonMobil, Chevron and ConocoPhillips, the U.K.’s BP and Shell, France’s TotalEnergies and Italy’s Eni, among others. As it stands, Russian crude oil imports to Europe have fallen from around 4.7 million barrels per day (bpd) in 2021 to less than 2 million bpd now, although the exact figure is clouded by the country’s oil exports through its growing shadow fleet of tankers. The E.U. banned most seaborne Russian oil imports shortly after the 2022 invasion and imposed price caps of US$60 per barrel (pb) on Russian crude alongside the U.S., Australia and other G7 allies. It added a further price cap on premium oil products of US$100 pb. Further sanctions have resulted in Russian gas imports to Europe plummeting from 136.7 billion cubic metres (Bcm) in 2021 to 28.5 Bcm in 2024.
That said, the E.U.’s ambition does not end here, with a target to completely end all Russian fossil fuel imports by 2027. A short-term focus of this will be tightening sanctions again on Moscow’s oil and gas imports and redoubling current efforts to reduce liquefied natural gas (LNG) imports, which have increased from 13.5 million metric tonnes in 2021 to 15.6 million metric tonnes in 2024. This is a key strategy for the E.U. as LNG became the world’ emergency energy supply following the 2022 invasion of Ukraine. Unlike oil and gas moved through pipelines, consistent LNG supplies do not require years of planning and construction beforehand, or lengthy and complex negotiations over transit routes. Instead, LNG can be bought quickly and in size in the spot market and moved fast to anywhere in the world. E.U. countries believe the chance of further Russian aggression on the eastern borders of member states is highly likely, regardless of any peace deal struck by Trump’s team. Indeed, NATO Secretary General and former Prime Minister of the Netherlands, Mark Rutte, recently said: “[Russian President, Vladimir] Putin believes that a serious, irreconcilable struggle is unfolding for the formation of a new world order – these are his own words. Others share his belief, not least China.” Consequently, he added: “This requires us all [in Europe] to be faster and fiercer. It is time to shift to a wartime mindset and turbo-charge our defence production and defence spending.” It also means that securing adequate and sustainable LNG supplies from sources other than Russia is a European security priority.

Therefore, any peace deal reached between the U.S. and Russia on Ukraine’s future – without Ukraine and Europe agreeing the terms – is unlikely to alter the intention of European countries to keep ratcheting up sanctions on Moscow. So although a deal concluded with the U.S. would make it easier for Russia to export oil and gas more freely around the world, its previous key market of Europe will remain difficult for it to exploit again to the same degree as before. “We have our own sanctions mechanisms in place that have been working well, and they will continue to perform properly even without any U.S. help,” the E.U. source told OilPrice.com last week. “It is increasingly obvious that we [the E.U.] cannot rely on the U.S. as we did before to safeguard our security, so it is even more vital that we assert ourselves against further Russian aggression by keeping current sanctions in place and extending them to our goal of zero [fossil fuel] imports [from Russia] by 2027,” he concluded.
In precisely this vein, the gruesome three-year anniversary of Russia’s invasion of Ukraine was greeted with a raft of new sanctions from the E.U. This 16th package of E.U. sanctions includes the dramatic expansion of restrictions against Russia’s shadow fleet of tankers that has made gauging the true effect of several previous sanctions measures on reducing Russian oil and LNG exports more difficult than it would be otherwise. In fact, the new sanctions increase the number of vessels targeted by 73, to 153 in total. It also extends sanctions to other high-volume, high-profit export areas for Russia, notably aluminium, chromium and high-value chemicals. Crucially as well, the E.U. is now targeting for the first time, the Russian System for Transfer of Financial Messages (SPFS) which was established to act as an alternative to the international SWIFT payment system. Specifically, the E.U. has imposed a ban on all SPFS transactions that occur outside Russia itself. As a broader signal of its intentions to allies and potential allies of Russia, the E.U. additionally imposed multiple sanctions on neighbouring Belarus.
oilprice.com
Feb 24, 2025
- Europe remains committed to sanctions on Russia.
- EU leaders see continued Russian aggression as likely, with NATO emphasizing a need for a "wartime mindset".
- The EU’s latest sanctions target Russia’s shadow fleet and financial system, expanding restrictions on oil and LNG exports.
anything, as in three or four months of tightening sanctions and minimal military gains in Ukraine he’d have got nothing at all,” a senior source who works closely with the European Union’s (E.U.) energy security complex exclusively told OilPrice.com last week. “Trump may give him [Putin] a lot more than nothing so he can keep his promise to the voters back home to end the [Russia-Ukraine] War quickly, but it doesn’t mean we [Europe] have to go along with it, nor Ukraine itself, particularly given the trouble involved in reducing Russia energy supplies in the first place,” he added.
Indeed, before the 2022 invasion, cheap and abundant oil and gas from Russia had been a key factor in the economic growth of many E.U. countries, most notably its de facto leader Germany. These energy supplies (and the effective devaluation of its prevailing currency when the then-mighty Deutschemark was replaced by the feeble Euro) turbocharged its growth for over two decades, so it was little wonder that Berlin was extremely unwilling to give them up. This was the primary reason why Russia’s test-run invasions of independent European sovereign countries Georgia in 2008 and Ukraine in 2014 were met with such an
impotent political, financial and military response from the E.U. at the times. And this pathetic reaction was a key reason why Putin felt so confident that the same would happen with a full-scale invasion of Ukraine that his armies rolled into the country on 24 February 2022, as fully detailed in my latest book on the new global oil market order. His calculations were almost right, with the early days of the invasion being marked in the E.U. not by furious and fierce rhetoric and actions but by whingeing concerns over how its member states could keep Russian oil and gas rolling into their refineries, despite clear knowledge that the proceeds would be used by the Moscow to fund murder in Ukraine. Following the 31 March 2022 decree signed by President Vladimir Putin that required E.U. buyers to pay in roubles for Russian gas via a new currency conversion mechanism or risk having supplies suspended, an official guidance document was sent out to all 27 E.U. member countries on 21 April by its executive branch, the European Commission (E.C.). It said: “It appears possible that E.U. companies can ask their Russian counterparts to fulfil their contractual obligations in the same manner as before the adoption of the decree, i.e. by depositing the due amount in euros or dollars.” The E.C. added that existing E.U. sanctions against Russia also did not prohibit engagement with Russia’s Gazprom or
Gazprombank beyond the refinancing prohibitions relating to the bank. It was only because Russia’s invasion was not completed in the anticipated seven days that the E.U.’s planned capitulation did not go ahead. Instead, the extra time gave the U.S., U.K. and France time to formulate a broad strategy that would allow the relevant E.U. member countries to see their Russian oil and gas supplies replaced from other sources, as also detailed in my latest book.
From then until now, companies from the U.S. and Europe – especially the U.K., France and Italy – have worked hard to build a network of new oil and gas supply sources stretching from the U.S.
itself through the Middle East (notably Qatar) to North Africa (especially Egypt). Big new supply deals have also been signed in other geopolitically vital energy-rich countries as well, including Iraq, Libya, and Saudi Arabia, by such firms as the U.S.’s ExxonMobil, Chevron and ConocoPhillips, the U.K.’s BP and Shell, France’s TotalEnergies and Italy’s Eni, among others. As it stands, Russian crude oil imports to Europe have fallen from around 4.7 million barrels per day (bpd) in 2021 to less than 2 million bpd now, although the exact figure is clouded by the country’s oil exports through its growing shadow fleet of tankers. The E.U. banned most seaborne Russian oil imports shortly after the 2022 invasion and imposed price caps of US$60 per barrel (pb) on Russian crude alongside the U.S., Australia and other G7 allies. It added a further price cap on premium oil products of US$100 pb. Further sanctions have resulted in Russian gas imports to Europe plummeting from 136.7 billion cubic metres (Bcm) in 2021 to 28.5 Bcm in 2024.
That said, the E.U.’s ambition does not end here, with a target to completely end all Russian fossil fuel imports by 2027. A short-term focus of this will be tightening sanctions again on Moscow’s oil and gas imports and redoubling current efforts to reduce liquefied natural gas (LNG) imports, which have increased from 13.5 million metric tonnes in 2021 to 15.6 million metric tonnes in 2024. This is a key strategy for the E.U. as LNG became the world’ emergency energy supply following the 2022 invasion of Ukraine. Unlike oil and gas moved through pipelines, consistent LNG supplies do not require years of planning and construction beforehand, or lengthy and complex negotiations over transit routes. Instead, LNG can be bought quickly and in size in the spot market and moved fast to anywhere in the world. E.U. countries believe the chance of further Russian aggression on the eastern borders of member states is highly likely, regardless of any peace deal struck by Trump’s team. Indeed, NATO Secretary General and former Prime Minister of the Netherlands, Mark Rutte, recently said: “[Russian President, Vladimir] Putin believes that a serious, irreconcilable struggle is unfolding for the formation of a new world order – these are his own words. Others share his belief, not least China.” Consequently, he added: “This requires us all [in Europe] to be faster and fiercer. It is time to shift to a wartime mindset and turbo-charge our defence production and defence spending.” It also means that securing adequate and sustainable LNG supplies from sources other than Russia is a European security priority.

Therefore, any peace deal reached between the U.S. and Russia on Ukraine’s future – without Ukraine and Europe agreeing the terms – is unlikely to alter the intention of European countries to keep ratcheting up sanctions on Moscow. So although a deal concluded with the U.S. would make it easier for Russia to export oil and gas more freely around the world, its previous key market of Europe will remain difficult for it to exploit again to the same degree as before. “We have our own sanctions mechanisms in place that have been working well, and they will continue to perform properly even without any U.S. help,” the E.U. source told OilPrice.com last week. “It is increasingly obvious that we [the E.U.] cannot rely on the U.S. as we did before to safeguard our security, so it is even more vital that we assert ourselves against further Russian aggression by keeping current sanctions in place and extending them to our goal of zero [fossil fuel] imports [from Russia] by 2027,” he concluded.
In precisely this vein, the gruesome three-year anniversary of Russia’s invasion of Ukraine was greeted with a raft of new sanctions from the E.U. This 16th package of E.U. sanctions includes the dramatic expansion of restrictions against Russia’s shadow fleet of tankers that has made gauging the true effect of several previous sanctions measures on reducing Russian oil and LNG exports more difficult than it would be otherwise. In fact, the new sanctions increase the number of vessels targeted by 73, to 153 in total. It also extends sanctions to other high-volume, high-profit export areas for Russia, notably aluminium, chromium and high-value chemicals. Crucially as well, the E.U. is now targeting for the first time, the Russian System for Transfer of Financial Messages (SPFS) which was established to act as an alternative to the international SWIFT payment system. Specifically, the E.U. has imposed a ban on all SPFS transactions that occur outside Russia itself. As a broader signal of its intentions to allies and potential allies of Russia, the E.U. additionally imposed multiple sanctions on neighbouring Belarus.
Can Europe Resist Concessions to Russia in Trump’s Ukraine Agreement? | OilPrice.com
Europe remains committed to sanctions on Russia despite ongoing U.S.-Russia peace talks, aiming to fully eliminate Russian fossil fuel imports by 2027
oilprice.com
