Europe to Ban All Russian Oil & Gas by 2027

---

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe is accelerating its plan to sever energy links and dependency on Russia by announcing legislation to ban all Russian oil and gas by the end of 2027.

The proposed regulation from the European Commission (EC) will cover a stepwise phase-out of pipeline gas and liquefied natural gas (LNG) "originating in or exported directly or indirectly from the Russian Federation." It will also cover the complete stop of Russian oil imports by the end of 2027. The Commission is calling on Member States to present diversification plans with precise measures and milestones for the gradual elimination of Russian gas and oil imports. To ensure transparency and accountability for any Russian gas slipping through the net, companies holding gas supply contracts for Russian gas will have to provide information to the Commission. In addition, importers of Russian gas will have to provide customs authorities with all necessary information confirming the path of the imported gas from its actual origin up to the point of import into the European Union (EU).

Russian gas imports under new contracts will be prohibited as of 1 January 2026. Imports under existing short-term contracts will be stopped by 17 June 2026, except those for pipeline gas delivered to land-locked countries and linked to long-term contracts which will be allowed until the end of 2027. Imports under long-term contracts will be stopped by the end of 2027. Long-term contracts for LNG terminal services for customers from Russia or controlled by Russian undertakings will also be prohibited. The Commission said this will ensure that terminal capacity can be redirected to alternative suppliers in order to maintain security of supply.

"Russia has repeatedly attempted to blackmail us by weaponizing its energy supplies," said Ursula von der Leyen, President of the European Commission. "We have taken clear steps to turn off the tap and end the era of Russian fossil fuels in Europe for good."

Dan Jørgensen, Commissioner for Energy and Housing, added: "Importing gas from Russia is a security threat to Europe. This is why we are now proposing an EU ban on Russian gas imports. This will increase our energy independence while also reducing the revenues Putin uses to finance his war. The Commission will work hand in hand with all Member States, especially those that may face challenges because of this. No Member State will be left without energy as a result of this proposal."

Last month, the EC revealed its 18th sanctions package against Russia, designed to hit its energy profits, military industry and banks. In those sanctions, the Commission proposed to ban any transactions from the Nord Stream 1 and 2 pipelines, which run from Russia to Germany via the Baltic Sea, and a new price cap on Russian oil. Von der Leyen said: "For the first time, we propose a transaction ban for Nord Stream 1 and Nord Stream 2. This means that no EU operator will be able to engage directly or indirectly in any transactions regarding the Nord Stream pipelines. There is no return to the past. We also propose to lower the oil price cap from US$60 to US$45 dollars per barrel. Since the oil cap was introduced in 2023, oil prices have gone down. They now trade very close to the cap level. By lowering the cap, we adapt it to changed market conditions and restore its effectiveness."

The Commission noted that oil exports still represent one-third of Russia's government revenue. The oil price cap is a G7 coalition measure, and it wants the coalition to back the latest cap, which it will reinforce by adding another 77 vessels that are part of the Russian shadow fleet. The list of targeted vessels now stands at 419, which Russia has been using to evade sanctions. The Commission has now also banned the import of refined products based on Russian crude oil to "prevent some of the Russian crude oil that reaches the EU market through the back door." The sanctions are also targeting the Russian banking sector to limit its ability to raise funding and conduct transactions by updating an existing prohibition to use the SWIFT system into a full transaction ban. Another 22 Russian banks have been added to a growing list of targeted financial institutions while financial operators in third countries that finance trade to Russia in circumvention of sanctions will now also be targeted.

Von der Leyen added: "We propose further export bans worth more than 2.5 billion euro (US$2.9 billion). This ban deprives the Russian economy of critical technology and industrial goods. We are targeting machinery, metals, plastics and chemicals: They are used as raw materials in industry. We also restrict the export of dual use goods and technologies that are used for producing drones, missiles, and other weapon systems. We want to make sure that Russia does not find ways to modernise its weapons with European technologies."

Measures taken by the Commission since Russia's invasion of Ukraine in 2022 have reduced the volumes of imported Russian gas from 150 billion cubic meters (Bcm) in 2021 to 52 Bcm in 2024 -- with the share of Russian gas imports dropping from 45% to 19%. All imports of Russian coal have been banned by sanctions; oil imports have shrunk from 27% at the beginning of 2022 to 3% today. Recent reports from The Moscow Times said that the combined net profits of Russia's oil and gas companies nearly halved in the first quarter of 2025, compared to the same period in 2024. Profits plummeted to US$9.9 billion (789.5 billion Russian rubles) in the first quarter of 2025, down from US$18 billion (1.445 trillion rubles) for Q1 last year.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).