Sweeping sanctions are reportedly being developed which would hit the Russian energy sector if Moscow orders an invasion of neighboring Ukraine, with the EU and the UK said to be drawing up plans for punitive measures with the support of Washington.
On Thursday, The Financial Times reported that sources involved in the discussions had revealed plans that would restrict financing and technology transfers for future gas projects. Targeting new development is seen as a way to punish Russia while potentially sparing European nations the rising prices and energy shortages they would face if current gas deliveries were cut off.
“Europe looking to hit long-term Russian gas production capacity would likely be a step up from anything we’ve seen before,” James Waddell, of London consulting firm Energy Aspects, told the FT. “It would hurt Russia by going after a sector they really care about, but it wouldn’t be cutting off your nose to spite your face in the way trying to restrict exports would be in the short term.”
According to Eurostat, the official statistical office of the European Commission, the EU imports 41.1% of its gas from Russia. The UK is much less reliant on Russian gas, but officials have warned that curtailing shipments to Europe would likely drive up prices everywhere, even in places that do not buy much from Russia.