The secondary market for LNG vessels should be closely monitored. Transshipments should be explicitly banned. Finally, the sanctions are not a call to replace 🇷🇺 LNG with other fossil fuels. Faster progress on energy efficiency and green transition is an excellent complement.

A price cap could serve as a transitional measure. It would limit revenues during the adjustment period and prevent frontloading of Russian profits. Unlike oil, Russia would struggle to circumvent such a cap, due to lack of shipping capacity and technological constraints.

Now, to what should be done more. The embargo is announced far in advance, starting jan 2027, as LNG market is shaped by long-term contracts. Therefore Russia may benefit from excess earnings before it takes effect.

Compared to what happened with the oil embargo, LNG is harder to reroute, and there's no "shadow fleet" of old tankers available to bypass sanctions. LNG tankers are a newer, more specialized technology, in high global demand. Not many outdated vessels lying around to be coopted.

Exporting LNG to China is theoretically an option, but logistically difficult and costly. The preferred Arctic route via the Baltic Sea is only usable with ice-class vessels—of which Russia owns just 15.

Russia is more dependent on the West for LNG than the West is on Russia. An estimated 93% of Russian LNG exports rely on G7+ maritime services for transport. Russia strived to become a global leader in LNG since 2019. But it still lacks the shipping capacity.

But not all imported LNG is actually consumed in the EU. Around 22% is re-exported outside the EU gas system—meaning it's not driven by internal need but by commercial or strategic considerations.

Countries like Spain, Belgium, France, and the Netherlands remain significantly dependent on Russian LNG. Some of them have even increased imports compared to pre-war levels.

Since Russia's full-scale invasion of Ukraine, EU imports of liquefied natural gas (LNG) have surged. While new suppliers have entered the picture, LNG volumes from Russia have not decreased. In some cases, they've even grown.

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“The economy may and are likely to decline in 2025,” Inosemtsev told The Moscow Times.

The excess of funds that was used to stimulate the economy is exhausted, says economist Vladislav Inozemtsev. To continue to support the military industry, the authorities will have to raise taxes and withdraw resources from the civilian sectors, and this will slow down growth, he explains.

The IMF predicts a slowdown to the Russian economy from 0.3% a year earlier, and economists polled by the HSE to 1.2%. The Central Bank forecasts growth this year at 1-2%, and next year - only 0.5-1.5%.