‘Shameless’: Greece and LNG remain roadblock in new Russia sanctions

The European Union’s push to approve a new round of sanctions against Russia has bumped into a formidable roadblock: Greece.

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The country, which hosts the world’s largest merchant fleet, has put its foot down and demanded an adjustment to the EU-wide ban on Russian liquefied natural gas (LNG), scheduled to take full effect on the first day of 2027.

The ban, as agreed last year, will prohibit the “purchase, import or transfer, directly or indirectly,” of LNG that “originates in Russia or is exported from Russia”.

Greece now seeks to reopen the measure and insert an exemption to allow the transport of Russian LNG to continue to non-EU clients worldwide. The coastal country is not interested in buying LNG for domestic consumption but wants to preserve the market opportunities that come with global shipping.

Greek officials argue that banning transport would be “all pain, no gain” because Moscow would find other countries, namely China, willing to take on the crucial job and would retain its energy income as it is today. (Greece used a similar argument earlier this year to derail a full ban on maritime services for Russian oil tankers.)

But the other member states sharply disagree and are aghast at Greece for suddenly attempting to retroactively challenge a legal text that was unanimously endorsed in October. The bloc used sanctions to strengthen its phase-out of Russian gas and allow private operators to invoke force majeure and break long-term contracts.

Greece’s push for an exemption to preserve its business interests is frustrating many diplomats. Some believe that the country has shown a much lower tolerance for economic hardship than the rest of the bloc, which has accepted far greater sacrifices in its effort to reduce ties with Russia.

“Shameless,” a diplomat said.

At the core of the dispute is Dynagas, a company specialised in shipping in sub-zero temperatures and owned by Greek billionaire George Prokopiou, who also controls another company that makes millions carrying Russian seaborne oil.

Dynagas and its subsidiary have chartered 11 vessels, including seven Arctic-resistant icebreakers, to the Yamal facility, Russia’s largest LNG producer.

The firm warns that the LNG ban’s entry into force in 2027 will risk a significant loss of revenue, an adverse material effect and even a default on debt agreements. It also says its icebreakers will be rendered useless without Yamal.

“It’s really a dilemma,” another diplomat said. “I am glad I’m not the Greek prime minister.”

Chaotic negotiations

The Greek blockage has become so entrenched that it has endangered one of the main elements in the new sanctions package: the price cap on Russian oil.

Under the rules, the cap, currently set at $44.10 per barrel, must be automatically adjusted every six months to remain at 15% below the average market price.

Since Russian oil soared in the aftermath of the closure of the Strait of Hormuz, the revision will send the cap to $58 per barrel, which would provide the Kremlin with breathing space at a time Ukraine enjoys momentum on the battlefield.

The European Commission considers this scenario unacceptable and has therefore proposed to delay the review until January next year to keep the cap at $44.10 per barrel.

The review was initially scheduled for 15 July. But as the tensions over LNG dragged on, ambassadors decided to briefly postpone it until 23 July to give themselves more time and find a proper agreement on the package as a whole.

Following several rounds of negotiations, some elements, such as banking, crypto and the shadow fleet, have been finalised, whereas others, such as fisheries and Patriarch Kirill, have been abandoned altogether.

Meanwhile, the entry ban on Russian soldiers has been downgraded – yet again.

The latest version indicates a commitment to continue fine-tuning the measure to guarantee a successful implementation in practice. France and Italy had raised concerns about the administrative burden and legal responsibility for consular services.

This means the ban will not apply until member states are convinced it will work.

A similarly ambivalent wording has been used to placate Austria over its contentious request to lift sanctions on Rasperia, a blacklisted investment company, to offset a €2.1 billion loss incurred by Raiffeisen Bank International in Russia.

Unlike last year, when the petition was outright dismissed, ambassadors have shown more sympathy this time and promised Vienna they would find a solution at a later stage.