New U.S. sanctions led by Donald Trump against Russian energy could pose a serious threat to the supply of liquefied natural gas (LNG) to Europe. These sanctions particularly include tariffs of over 100% for countries that continue to purchase Russian oil or natural gas. China and India are among the countries that will be pressured as a result.
Consequences of Sanctions on Europe's Gas Supply
The European Commission has announced that it will work with Washington to ensure minimal disruptions from these sanctions. This comes as Europe is currently trying to fill its gas reserves to at least 80% by November. According to provided information, winter gas reserves are at their lowest level since 2011, and fierce competition from Asian buyers has raised concerns in this regard.
Read more: Abbas Araghchi Presented Iran's Conditions for Reopening the Strait of Hormuz
New Developments in the Middle East and Their Impact on LNG
The new U.S. sanctions come in the wake of rising tensions in the Middle East and recent bombings by Israel and the United States against Iran on February 28, 2023. These developments have led to the closure of the Strait of Hormuz and damage to a vital Saudi pipeline, ultimately disrupting LNG transit. Meanwhile, despite an increase in gas imports from Russia to 17%, landlocked countries have received special exemptions.
The new U.S. law, which is likely to be reviewed by Congress on October 18, could include sanctions against owners or operators of foreign ports that service U.S.-sanctioned vessels. This could impact European ports such as the Port of Odense in Denmark.
In the meantime, European companies like Fayar, which repair Russian LNG ships, are under political pressure. Members of the European Parliament, such as Jonas Sjöstedt and Hannah Neumann, have called for a halt to these activities, emphasizing that such actions bolster Russia's military power.
Read more: Natural gas prices rise above $3 due to production cuts and repurchases · Improving trend in China's LNG ship orders in 2023
