According to a senior EU official, the European Commission is examining potential legislation that would prohibit European Union companies from signing new contracts for Russian fossil fuels.
Natural gas exports have long been a cornerstone of Russia’s economy, providing a significant share of the country’s budget revenue. By targeting future gas contracts, the European Union aims to limit one of Moscow’s key sources of foreign income. A substantial portion of these revenues is funneled into the state budget, which directly finances weapons production and soldier salaries.
Despite EU sanctions, Russia earned EUR 21.9 billion from EU fossil fuel imports in the invasion’s third year, surpassing the amount of financial aid provided to Ukraine. Russia generated €242 billion globally from fossil fuels (only 3% less year-on-year) using shadow tankers and redirected exports to China, India, and Türkiye.
Reuters reports that the Commission is also developing legal options that would allow EU companies to terminate existing gas supply contracts with Russia without facing financial penalties.
On 1 January 2025, Ukraine halted all transit of Russian gas to EU markets, citing national security concerns and the expiration of its transit agreement with Russia. This decision forced the EU to secure alternative energy supplies through expanded LNG capabilities and infrastructure flexibility.
Some EU member states, such as Hungary and Slovakia, consistently opposed energy sanctions requiring unanimous approval due to their pro-Russian governments and dependence on Russian energy supplies.
The Commission plans to present various options for reducing Europe’s dependence on Russian energy in a “roadmap” scheduled for release on 6 May.
“The Commission is looking at options – potentially including EU trade measures – that could forbid European companies from entering into new contracts for Russian fuel,” the official, who was granted anonymity, told Reuters.
The initiative to prohibit new contracts specifically targets European companies’ spot purchases of Russian liquefied natural gas (LNG).
While Russian pipeline gas deliveries have dramatically decreased since Russia’s full-scale invasion of Ukraine in 2022, the EU actually increased its imports of Russian LNG last year. As of 2024, Russia still supplies 19% of the EU’s total gas and LNG.
The Commission indicated that any measures restricting Russian energy imports must have a greater negative impact on Moscow than on the EU, while also considering effects on Europe’s energy security and fuel prices.
If the Commission decides to proceed with any of these legal tools, it would then propose legislation that could require approval from the European Parliament and a reinforced majority of EU countries.
