Greece has blocked the approval of a new package of European Union sanctions, insisting on an exception to the complete ban on Russian liquefied natural gas (LNG). EU member states are outraged by this request, with one diplomat describing it as “shameless”. The European Union’s efforts to finalize a new sanctions package against Russia have hit a significant roadblock due to Greece’s stance.
The country, which boasts the world’s largest merchant fleet, is seeking modifications to the EU-wide ban on Russian LNG, set to take full effect on January 1, 2027. The ban, agreed upon last year, prohibits the “purchase, import, or transfer, directly or indirectly” of LNG that “originates from Russia or is exported from Russia”. Greece aims to amend this regulation to allow the transportation of Russian LNG to customers outside the EU. While Athens is not interested in purchasing LNG for domestic use, it wants to maintain market opportunities related to global shipping.
Greek officials contend that the transportation ban will result in “only pain, no gain”, as Moscow will turn to other countries, particularly China, willing to take on this work, thereby retaining its energy revenues. Earlier this year, Greece used a similar argument to block a complete ban on maritime services for Russian oil tankers. Other member states strongly disagree, expressing outrage that Athens is attempting to retroactively alter the legal text that was unanimously approved in October. The EU has implemented these sanctions to expedite the phased rejection of Russian gas and to allow private operators to invoke force majeure and terminate long-term contracts. Greece’s efforts to protect its business interests have frustrated many diplomats, with some believing that the country has shown significantly less willingness to accept economic losses compared to the rest of the EU, which has made much greater sacrifices to reduce ties with Russia. “Shameless,” remarked one diplomat.
Dispute over Dynagas and the price cap
At the center of the dispute is the company Dynagas, which specializes in low-temperature transportation and is owned by Greek billionaire Georgios Prokopiou. He also controls another company that generates millions from transporting Russian seaborne oil. Dynagas and its subsidiary have chartered 11 vessels, including seven Arctic icebreakers, for the Yamal project — the largest LNG producer in Russia. Dynagas warns that the implementation of the LNG ban in 2027 poses a significant risk of revenue loss, substantial negative impacts on business, and even potential default on debt obligations. The company also states that its icebreakers will become unnecessary without Yamal. “This is really a dilemma,” said another diplomat. — “I am glad I am not the Prime Minister of Greece.”
Greece’s position has complicated negotiations to the extent that it jeopardizes one of the main components of the new sanctions package — the price cap on Russian oil. According to the rules, the price cap is automatically reviewed every six months to remain 15% below the average market price. Currently, it is set at $44.10 per barrel. With prices of Russian oil surging following the closure of the Strait of Hormuz, the next review could raise the cap to $58 per barrel, providing the Kremlin with additional financial relief just as Ukraine gains an advantage on the battlefield. The European Commission finds this scenario unacceptable and has proposed postponing the review until January of next year to maintain the restriction at $44.10 per barrel. The review was initially scheduled for July 15, but due to ongoing disputes over LNG, ambassadors decided to delay it to July 23 to allow more time to reach an agreement on the entire package.
Other elements of the sanctions package
After several rounds of negotiations, some elements have been refined, including those related to the banking sector, cryptocurrencies, and the shadow fleet, while others have been completely rejected, such as proposals regarding fishing and Patriarch Kirill. The entry ban for Russian soldiers has also been softened. The latest version of the document includes a commitment to continue refining this measure to ensure its practical application. France and Italy have expressed concerns about the administrative burden and legal liability for consular services, meaning that the ban will not take effect until member states are convinced it can be effectively implemented.
A similar compromise formulation was used to address Austria regarding its controversial request to lift sanctions on Rasperia, an investment company blacklisted to compensate for the loss of €2.1 billion incurred by Raiffeisen Bank International in Russia. Unlike last year, when this request was entirely rejected, this time the ambassadors showed more understanding and promised Vienna to find a solution at a later stage.
