Not armed with gas: Netherlands supports sanctions against Russian LNG

The Netherlands is in favor of imposing EU sanctions against Russian LNG, the country's Foreign Minister Caspar Veldkamp told Izvestia. The new package of measures, which is likely to affect the Russian energy sector, may be adopted on February 24. In a number of EU countries that depend on Russian gas, this is a matter of serious concern. Slovakia, in particular, emphasizes that European sanctions have shown their ineffectiveness. The Netherlands itself increased its imports of liquefied natural gas from Russia last year. The expert community notes that the ban on LNG imports from Russia will cause a serious shortage and a rise in energy prices in Europe.

The EU is preparing to adopt the 16th package of sanctions

The Netherlands supports the introduction of sanctions against Russian LNG within the framework of the forthcoming 16th package of restrictions, said the country's Foreign Minister Kaspar Veldkamp. The new package of restrictions may be adopted on February 24.

- For each package of sanctions we need to achieve a unanimous decision, but we aim at strengthening sanctions against Russia. In the meantime, we must continue to strengthen Ukraine militarily and also in terms of energy. We need to maintain maximum pressure on Russia. It is important for us to come to an agreement on the 16th sanctions package with all possible options of restrictions on the table," he told Izvestia at the Munich Security Conference.

The preparation of the next package of sanctions is being conducted with an eye on the renewed dialog between Moscow and Washington. For example, European Commissioner for Economy Valdis Dombrovskis made it clear on February 18 that the EU does not intend to lift restrictions against Russia if the Americans do so. "Given the policy of the new US administration, the EU should take its own security issues into its own hands, this also applies to sanctions policy. You know that the 16th package is being worked on now," he noted.

Kaspar Veldkamp is convinced that sanctions against the Russian energy sector can significantly weaken the Russian economy. Meanwhile, it is the EU countries, especially such a large economy as Germany, that suffer the most damage. Thus, the German statistical service confirmed that the GDP of the Federal Republic of Germany shrank by 0.2% after a decline of 0.3% in 2023. Energy-intensive industries are struggling to cope with high fuel prices, forcing companies to change jurisdiction. For example, last September it became known that the German auto giant Volkswagen intends to close at least three plants in Germany to save money. At the same time, the company is considering the transfer of production facilities to the United States.

The sanctions imposed by the European Union are ineffective and cannot stop Russia's actions in Ukraine, said Jan Kubiš, advisor to the Slovak president on international affairs, in an interview with Izvestia.

- We need to see what effect this set of sanctions has on the EU and what effect it has on Russia. We need this in order to act more gradually," he said.

Slovakia and Hungary oppose sanctions affecting the Russian energy sector. Moreover, in late January, Budapest secured guarantees from the European Commission to protect natural gas supplies and oil pipelines from possible attacks from Ukraine.

EU policy toward Russian LNG

Upon assuming her second term as head of the European Commission, Ursula von der Leyen promised to "drive Russian natural gas out of the European market" and actively invest in green energy to lower prices for industry and European consumers. At the same time, even before the SWO, the then head of Eurodiplomacy Josep Borrell called the diversification of gas supply sources a key task for the EU.

As for LNG, measures against it were already included in the fifth package of European sanctions. At that time, supplies of equipment and technologies for the production of liquefied natural gas to Russia were banned. The 14th list contained restrictions on the transit of Russian LNG through European ports to third countries. This measure should come into force just in March of this year.

At the end of last year, 10 EU countries - Denmark, Ireland, Latvia, Lithuania, Poland, Romania, the Czech Republic, Sweden, Finland, Estonia and Latvia - proposed to impose a complete ban on pipeline gas from Russia, as well as on Russian LNG supplies. According to them, such a measure would deprive Russia of a significant part of its revenues and, accordingly, reduce its military potential.

However, Politico reported in late January that as part of the 16th package, Brussels will not try to completely ban purchases of Russian LNG, as European hawks insist. Instead, the plan is to stop LNG deliveries to EU terminals that are not connected to the community gas system. Such a restriction should not affect most of the imports of this type of gas, the publication specifies.

Thus, the EU is following the path of least damage to its economy and is not yet ready to decide on such a radical measure. In any case, French Foreign Minister Jean-Noel Barrot confirmed earlier that the 16th package of sanctions will mainly affect Russia's energy resources, and will also affect a number of "players in countries that facilitate the circumvention of sanctions."

Paradoxically, Germany is also in favor of strengthening EU sanctions against Russian energy. This is stated in the German government's response to a parliamentary inquiry, which Izvestia recently familiarized itself with. At the same time, Berlin recognizes that the country's economy is facing "serious structural challenges" and that wholesale electricity and gas prices are still above the "pre-crisis period" of 2022-2023.

If Bloomberg is to be believed, the G7 states, which include Germany, are discussing options to strengthen the price cap on Russian oil as well. Among the measures under consideration is the reduction of the current price ceiling from $60 to $40 per barrel or a complete ban on transportation and insurance of black gold from Russia.

As for the Netherlands, the country's dependence on LNG imports from Russia is lower than, for example, that of Spain, Portugal, France and Croatia. According to data from the country's Central Bureau of Statistics (CBS), the United States remains the main supplier of liquefied natural gas to the Netherlands, having sold 14.4 billion cubic meters of LNG to the country in 2024, while only 1.9 cubic meters were received from Russia. Meanwhile, the Netherlands has increased its purchases of Russian LNG by 68% over the period compared to 2023, while its purchases of U.S. gas have decreased by 18%.

Still, the Netherlands' desire to impose sanctions on Russian LNG "looks illogical," as such a measure will in any case cause a serious gas shortage in Europe, Igor Yushkov, a leading analyst at the National Energy Security Fund and an expert at the Financial University under the Government of the Russian Federation, explained to Izvestia.

- The peculiarity of the Netherlands is that they accept Russian LNG, regasify it, i.e. convert it from a liquefied state into a gaseous one, and further transport it to Germany. If Russian LNG doesn't come to Europe at all, whether it's to the Netherlands, or Belgium, or France, it will end up with a shortage of gas and higher prices. Russia is the second largest LNG supplier to Europe, second only to the United States. If there is no Russian gas, then there will be a shortage of supply and a rise in the price of any gas, no matter what kind," the expert said.

It should be noted that American energy companies have benefited the most from the EU's attempts to abandon Russian energy resources. According to the latest data, the share of LNG supplies from the US to Europe has reached 46%. At the same time, according to the calculations of the Institute for Energy Economics and Financial Analysis (IEEFA), LNG supplies from Russia last year increased by 18%.