EU Softens Russian LNG Sanctions, Allowing Shipping and Trading to Continue Beyond 2027

The European Union has eased planned restrictions on Russian liquefied natural gas (LNG) by allowing European companies to continue transporting and purchasing Russian LNG to buyers outside the bloc after Jan. 1, 2027.

The exemptions, adopted as part of the EU’s 21st sanctions package, mark the first significant rollback of the bloc’s Russian LNG sanctions and provide an important lifeline to Russia’s Yamal LNG

The changes were approved last week after Greece delayed adoption of the EU’s 21st sanctions package unless protections were included for Greek shipping company Dynagas, whose Arc7 icebreaking LNG carriers transport cargoes from Russia’s Yamal LNG project in northern Siberia.

Earlier this year, the European Union clarified that its Russian LNG restrictions taking effect on Jan. 1, 2027 would extend well beyond banning imports into the bloc.

They would also prohibit EU companies from transporting Russian LNG, as well as purchasing and selling it to customers outside the European Union, effectively ending the participation of European shipping and trading companies in Russia’s global LNG export business.

The revised sanctions reverse part of that policy.

“The general public is under the impression that – overall - bringing Russian gas into the EU is prohibited. In fact, that is not exactly the case. Gas-related sanctions are actually quite narrow. While release for free circulation of LNG into the EU will generally be prohibited as of 1 January 2027, transportation of LNG into EU territory, storage in the EU or exports from EU could potentially continue,” highlights Tomasz Wlostowski, an EU sanctions expert and managing partner at EU Strategies, an advisory on regulations for energy and climate.

Under the revised sanctions, companies operating under contracts signed before Feb. 24, 2022 may continue transporting Russian LNG to third-country markets until at least July 25, 2027.

The exemption can then be renewed by the Council in successive one-year periods following an annual review, creating the possibility that the arrangement could remain in place well beyond the initial deadline.

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Legacy suppliers stay in game

The revised sanctions also exempt “purchases related to those transfers,” language that allows European companies holding legacy supply contracts – including France’s TotalEnergies and Spain’s Naturgy – to continue purchasing Russian LNG associated with the exempted shipments before selling it to buyers outside the European Union.

“In practical terms, a quasi-oligopoly has been created, where only a few EU companies with pre-existing contracts can potentially indefinitely continue to carry, purchase and resell Russian LNG into global markets,” explains Wlostowski.

Industry sources say the revised regulation leaves some operational questions unanswered, but they broadly agree that the exemption preserves a commercial role for European traders and shipping companies.

The regulation also caps transport and purchase volumes at 2025 levels, the highest year on record for Russian LNG shipments into Europe, rather than using a pre-war baseline, allowing companies to maintain trade close to current levels.

A language change in the 21st package also raises questions about the storing of Russian LNG in Europe after January 1. This ban may now only apply to Russian-controlled entities, and no longer to EU parties.

“The exact intention of recent changes, which removed an explicit reference to EU-based Russian-controlled entities being subject to this ban is not fully clear, but certainly raises questions about future direction of EU sanctions policy as applicable to Russian gas,” warns Wlostowski of EU Strategies.

Sanctions weakening

Before the revisions, the combination of the EU’s import ban and restrictions on transportation and purchases threatened to deprive Yamal LNG of several of its most important European commercial partners after Jan. 1, 2027, even if demand remained strong in Asia and other markets.

Under the new rules, European shipowners, traders and terminal operators can continue participating in parts of the project’s export chain under grandfathered contracts signed before Russia’s full-scale invasion of Ukraine.

The exemptions come at a time when the European Union is continuing to import record volumes of Russian LNG.

Russian LNG imports during the first half of 2026 exceeded those recorded during the same period of 2025, extending an upward trend even as Brussels prepares to eliminate Russian LNG imports under its REPowerEU strategy beginning in 2027.

Sanctions unity

The dispute has also exposed divisions within the European Union over sanctions policy.

Greece argued that banning European shipping companies from transporting Russian LNG to non-EU destinations would simply hand the business to non-European competitors while harming Greek commercial interests.

The compromise ultimately secured unanimous approval of the wider sanctions package while preserving a role for EU companies in Russia’s LNG exports.

"It is one thing to negotiate the scope of a new package. But to allow the Greeks to blow a major hole in an already existing sanctions measure - especially on a key one such as energy and LNG - is a major defeat for the long term well being of EU sanctions policy," concludes Wlostowski.

While the European Union’s market will close to Russian LNG beginning in 2027, the latest sanctions almost certainly ensure European companies will continue to play a significant role in transporting, purchasing and marketing Russian LNG destined for customers outside the bloc under qualifying long-term contracts.

For Russia’s Yamal LNG project, which depends heavily on European shipping, trading and logistics expertise, the changes represent a significant easing of what had previously been one of the most consequential restrictions imposed by the European Union on the project’s future commercial operations.