Europe Delivers 'Final Nail' Into Putin Gas Empire's Coffin

The latest proposed EU sanctions aimed at punishing Vladimir Putin for his full-scale invasion of Ukraine could deliver the knockout blow for Russian natural gas sales in Europe, according to one energy analyst.

If approved by all EU members, the package "could put the final nail in Nord Stream 2's coffin" Olga Khakova from the Atlantic Council's Global Energy Center said, referring to the pipelines between Russia and Germany.

Russia's oil and banking sectors were also targeted by the EU'S 18th sanctions package unveiled Tuesday by European Commission president Ursula von der Leyen who said that "strength is the only language that Russia will understand."

Ivan Hortal Sanchez from Razom We Stand told Newsweek the Ukrainian climate campaign group welcomed the proposal but the EU should also sanction more tankers carrying liquefied natural gas (LNG) from Russia. Newsweek has contacted the Kremlin for comment.

Why It Matters

Russia's natural gas exports are critical revenue generators to pay both for the war Putin started and for his plans to expand Moscow's military.

As Europe weans itself off Russian gas which Moscow is struggling to sell elsewhere, the EU's sanctions package could end the prospect of the reopening of the Nord Stream pipelines.

The measures also target Russia's sanctions-busting "shadow fleet" of oil tankers and could impose a $45 price cap on seaborne oil, which if approved by all EU members, would deliver a further blow to Moscow's coffers.

What To Know

European officials announced Tuesday the EU's 18th raft of sanctions aimed at forcing Russia to the negotiating table to end the war in Ukraine.

EU foreign policy chief Kaja Kallas said the package would sanction firms linked to the Nord Stream pipelines that have been non-operational but are at the center of speculation over whether they could be restarted.

Khakova deputy director for European energy security at the Atlantic Council's Global Energy Center, said that the package "could put the final nail in Nord Stream 2's coffin."

In comments emailed to Newsweek, Khakova added it would end the "zombie project debate once and for all" and would send a message to LNG producers, which may be hesitant to expand partnerships with the European buyers if reverting to Russian gas dependence was a possibility."

Ivan Hortal Sanchez, European Union campaigner at Razom We Stand, told Newsweek Nordstream symbolized the EU's toxic dependence on Russian gas before the full-scale invasion.

However, Russia's pivot to LNG shipping keeps fueling the Russian war machine and so Brussels should sanction more tankers carrying the Russian fuel, particularly those insured or owned by European companies, he added.

Razom We Stand has also called for the further listings of Russian shadow fleet tankers, which are being used to circumvent an EU and G7-led oil price cap.

That cap which took effect in February 2023 set at $60 per barrel of seaborne crude but oil prices have decreased a lot since then.

Von der Leyen pitched a new cap of $45 per barrel as well as banning importing refined products made with Russian crude oil and traded under a different label.

The EU sanctions would also aim at limiting the Kremlin's ability to raise funds or carry out financial transactions, with a further 22 Russian banks to be hit with measures.

Also, the assets of more than 20 Russian and foreign companies alleged to be providing support to the Kremlin's war machine would be frozen.

What People Are Saying

Olga Khakova deputy director for European energy security at the Atlantic Council's Global Energy Center: "This package could put the final nail in Nord Stream 2's coffin, providing a much overdue, decisive vision for the future of Russian pipeline gas flows to Europe."

Ivan Hortal Sanchez, European Union Campaigner at Razom We Stand: "We welcome the European Commission's proposal to sanction Nord Stream 2 once and for all...The European Union should never return to the era of Russian pipeline gas, which has been weaponized by the Kremlin since the start of the war."

What Happens Next

The EU has set a roadmap to fully end EU dependency on Russian energy by 2027 and the sanctions package is a step towards that. However, the latest package will require tight language on sanctions implementation to prevent caveats or exemptions.

The package also requires the backing of all 27 EU members. Slovakia's populist Prime Minister Robert Fico and Hungary's hard-right leader, Viktor Orbán, who are on good terms with Putin, have threatened to block additional EU sanctions on Russian energy.

The oil price cap is a Group of 7 measure and van der Leyen said this will be discussed at next week's G7 meeting in Canada.