Sopuruchi Onwuka

Key buyers of Russian natural gas will come under intense deterrence to switch to other sources as the European Commission and the United States work together on a more stringent choke on rogue market operators.

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The Oracle Today reports that the European Union has indicated intentions to impose sweeping sanctions against Russia in a bid to force the Kremlin into serious negotiations for a lasting peace in Ukraine.

President of the European Commission, Ursula von der Leyen, is reported to have endorsed a new bi-partisan bill in the US Senate to push President Donald Trump into action against Russia following the reluctance of President Putin to come to negotiation table on ending his invasion of Ukraine.

The draft bill in the United States comes at a time the European Union is decided on the next package of sanctions targeting Russia’s financial sector, its “shadow fleet” and Nord Stream pipelines.

The EU is also working to lower the G7 price cap on Russian seaborne oil, which has remained untouched at $60 per barrel since its introduction in late 2022.

Under the draft law, the US would impose prohibitions on financial transactions with entities owned or affiliated with the Kremlin and also introduce secondary tariffs of some 500% on any country that knowingly sells, supplies, transfers, or purchases oil, uranium, natural gas, petroleum products, or petrochemical products that originated in the Russian Federation.

Von der Leyen declared that “these steps, taken together with US measures, would sharply increase the joint impact of our sanctions.”

“Combined with actions targeting Russia’s shadow fleet limiting Russia’s ability to transport its oil, it’s an effective measure to dry up the Kremlin’s resources to wage the war,” she stressed.

The Oracle Today reports that if the sanctions come into effect as designed, it would cause a major shift in the pattern of energy flow in the international market by forcing several European countries to displace Russian oil and gas supplies with massive LNG imports.

Analysts calculate that significant LNG imports by France, Spain, Belgium, the Netherlands and Portugal would have to shift to Asia, Middle East and Africa (AMEA), while pipeline gas flows from Russia into Italy, Greece, Hungary, Slovakia and Bulgaria might have to be replaced with LNG imports.

Unless the new price cap on Russian oil proposed in the new package of sanctions is accepted by the Kremlin; Hungary and Slovakia may also seek significant imports to displace Russian pipeline oil.

Also, China and India which have been targeted with the 500% tariffs for being prime recipients of rogue oil and LNG exports may be forced to switch supplies from Russia.

Promoters of the sanction packages in the US Senate have pledged to hit China and India with the most draconian bill prescribing bone-crushing impacts that would place Russia’s economy “on a trade island.”

EU officials believe the combination of 500% tariffs with a lower price cap would have a devastating impact on Moscow, as global clients would rush to flee Russian energy and precipitate a plunge in revenue for the federal budget.