HomeMediaLatest NewsExports under attack: new sanctions against Russian oil and gas

Exports under attack: new sanctions against Russian oil and gas

14 January 2025

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Gromov, Principal Director on Energy studies, and Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, assessed the short- and medium-term prospects for Russian oil and gas exports in an interview with the Neft and Capital Internet portal.

Alexey Gromov noted that previous US sanctions against the Russian oil fleet were imposed on a smaller scale. And now more than 180 vessels have been "covered" at once. At one moment, it will not be possible to adapt to this, traders will need time.

Companies from Russia, of course, will adapt, but this will affect the marginality of their exports. As Alexey Gromov noted, more intermediaries will have to be used in trading, and discounts will have to be provided, because in conditions where oil is above $ 80 per barrel, there will be fewer people willing to buy it from Russia above the "cap" of $ 60.

Of course, there will be an effect of restrictions on oilfield services and exploration companies, but as Alexey Belogoryev stated the Russia gas industry is much less dependent on imported equipment and technologies than oil one. However, this is apart from the chronic shortage of gas carriers for LNG projects in Russia.

"The industry in Russia provides itself with almost 90% of everything necessary. What is really painful for it is the loss of export volumes. The United States has been trying to limit it since September 2023, only gradually increasing the pressure. There is an obvious timetable behind these sanctions, which is being adjusted in accordance with the supply-demand balance in the global LNG market. While it is in short supply, restrictions apply only to LNG projects under construction or planned in Russia. But after 2026, when a surplus is projected due to new liquefaction capacities on the global market, we can safely expect sanctions against existing projects like Yamal LNG," Alexey Belogoryev concluded.

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