Biden's farewell greetings: what will the Russian fuel and energy sector lose due to new US sanctions

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented on the new US sanctions against the Russian fuel and energy complex to Forbes.

This is the largest package of sanctions restrictions on the Russian oil and gas industry since the embargo and the price cap for Russian oil and petroleum products were introduced, Alexey Gromov stated in an interview with Forbes.

"Therefore, unfortunately, these restrictions will have to be taken very seriously," he notes.

Gromov draws attention to the fact that Gazprom Neft and Surgutneftegaz are on the sanctions lists in their entirety, including refining units and other types of services. The sanctions will seriously worsen the financial results of these companies, since in order to continue operating in international markets, they will have to overcome restrictions on exports by increasing the number of intermediaries, Gromov says.

"And a larger number of intermediaries means bigger discounts on Russian oil and lower export margins," he states.

The expert also notes that serious restrictions have been imposed on the Russian shadow fleet.

An important element of the sanctions pressure on Russia is the inclusion in the sanctions lists of medium—tonnage LNG plants in the Baltic - Cryogaz-Vysotsk and Portovaya, Gromov notes. According to him, only two Russian LNG projects are not under sanctions - the large—capacity Sakhalin-2 enterprises, focused on Asian markets, and Yamal LNG, which is able to redirect its volumes to Asia. According to Gromov, the profitability of medium-tonnage plants is high only when shipping goods over short distances, and since they have not yet been included in the sanctions lists, Russia could increase LNG exports to Europe due to their work.

"Apparently, in the coming years we will have to make every effort to maintain the volume of exports that we provided in previous years, without its significant increase as part of the sanctions pressure," the analyst concludes.