In a move that underscores the geopolitical balancing act facing European policymakers, the European Union has reportedly abandoned plans to impose a ban on imports of Russian liquefied natural gas (LNG), according to an exclusive report from Reuters. The proposal, which was expected to be part of the bloc’s 17th sanctions package against Moscow, has been shelved following internal dissent and concerns over the broader implications for EU-US trade negotiations.

The backtracking represents a pragmatic, if controversial, decision by Brussels to retain Russian LNG as a strategic bargaining chip. As pressure mounts to maintain economic stability while punishing Russia for its ongoing war in Ukraine, the EU has opted to keep options open rather than lock itself into a restrictive energy policy that could undermine leverage in high-stakes talks with Washington.

The decision to drop the LNG ban from the sanctions package highlights deep divisions within the EU over how far to go in severing economic ties with Russia. While some member states, particularly in Eastern Europe and the Baltics, have long advocated for comprehensive sanctions, others – notably France, Spain, and Belgium – continue to rely heavily on Russian LNG imports to meet domestic energy needs.

According to the Institute for Energy Economics and Financial Analysis (IEEFA), these three nations alone accounted for 85% of Europe’s Russian LNG imports in 2024. While pipeline gas imports from Russia have plummeted since 2022 following the Nord Stream sabotage and subsequent geopolitical rifts, imports of LNG from Moscow have paradoxically increased, suggesting a more nuanced reality than the EU’s official rhetoric often admits.

In 2024, Russia was the second-largest supplier of LNG to the EU, with a 17.5% share of the market – trailing only the United States, which supplied a dominant 45.3%. Despite the European Commission’s public commitment to phasing out all Russian fossil fuel imports by 2027, Russian LNG remains embedded in the continent’s energy matrix.

EU officials speaking anonymously to Reuters emphasized that banning Russian LNG now would diminish Brussels’ negotiating power in ongoing trade discussions with the United States. The European Commission is currently engaged in a broader effort to persuade Washington to lift the 25% tariffs imposed on EU steel and aluminum exports – levies that were reinstated in February under President Donald Trump’s administration.

Although a 90-day suspension was granted to allow time for negotiations, no firm resolution has emerged. EU Trade Commissioner Maros Sefcovic met with US officials in Washington last week in what was described as a “scoping exercise” – an initial step in a complex process aimed at defining both sides’ expectations and red lines.

According to one EU official, energy imports – including LNG – are now viewed as crucial leverage in these talks. “Sanctioning Russian LNG at this stage would reduce our flexibility,” the official said. “It’s one of the few strategic assets we can use to push back on tariffs and other US trade demands.”

President Trump has repeatedly urged the EU to purchase more American gas, a policy goal that aligns with US energy exporters’ commercial interests. By retaining access to Russian LNG, the EU keeps the door open for comparative shopping, thus strengthening its hand in securing more favorable terms from Washington.

The failure to reach consensus on banning Russian LNG is also emblematic of the broader challenges facing the EU’s sanctions regime. While Brussels has passed 16 packages of punitive measures against Russia since the invasion of Ukraine in 2022, each new round of sanctions has grown more difficult to implement as lower-hanging targets are exhausted and intra-bloc disagreements grow.

The idea of banning Russian LNG was previously floated during negotiations for the 16th sanctions package, but was dropped in January 2025 due to pushback from key member states. This time around, the proposal was again sidelined – not only because of energy security concerns but also due to realpolitik calculations involving the United States.

Despite the European Commission’s insistence that the 17th sanctions package will demonstrate “unwavering resolve,” the omission of LNG restrictions reveals the EU’s growing struggle to balance ideals with practicality. For countries already grappling with inflation, high energy prices, and political unrest, pushing through another contentious sanctions item risked sparking further domestic backlash.

Meanwhile, Moscow shows no signs of retreating from the global energy market. At the India Energy Week conference in New Delhi earlier this year, Russia’s first deputy energy minister, Pavel Sorokin, stated that Russia is ramping up LNG production and targeting growing markets such as India. “We are ready to offer competitive pricing,” Sorokin said, stressing that Russia “will continue trading with partners regardless of Western pressure.”

Russia’s ability to redirect energy exports to Asia and other non-Western markets is a vital lifeline for its economy and a key reason why EU sanctions have struggled to fully sever the Kremlin’s war-financing capabilities. LNG, unlike pipeline gas, is more easily re-routed via maritime transport – allowing Russia to mitigate some of the economic fallout from Western restrictions.

The European Commission is expected to unveil its roadmap for ending dependence on Russian energy by 2027 in early May. But given the current trajectory and the realities of global energy demand, the timeline appears ambitious. The Commission will face increasing scrutiny over how it plans to bridge the gap between its political declarations and the actual state of Europe’s energy infrastructure.

In the meantime, the EU’s decision to walk back the LNG ban will likely fuel criticism from Ukraine and pro-sanctions advocacy groups, who argue that economic pressure on Moscow must be escalated, not softened. But for now, energy pragmatism and transatlantic trade considerations have taken precedence over ideological consistency.

As the war in Ukraine continues with no clear end in sight, the EU’s balancing act between sanctions, energy security, and economic diplomacy will only become more precarious. Whether Brussels can maintain unity among its 27 member states while also navigating a volatile global energy landscape remains an open question – and one with profound consequences for Europe’s political and economic future.

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Source: Weekly Blitz :: Writings