The United States is intensifying its efforts to reduce Russia’s liquefied natural gas (LNG) exports as part of its strategy to cut off funding for Moscow’s war in Ukraine. Geoffrey Pyatt, the U.S. Assistant Secretary for Energy Resources, stated that the goal is clear: to decrease Russia’s earnings from oil and gas.
This initiative includes sanctions on Russia’s Arctic LNG 2 plant. These sanctions have effectively stopped tankers from reaching foreign ports, mainly due to concerns about potential U.S. retaliation.
The Arctic LNG 2 project, located on the Gydan Peninsula in the Arctic, was vital for Russia’s plans to increase its global LNG market share from 8% to 20% by 2030-2035. However, since the U.S. imposed new sanctions in November 2023, the project has been stalled. As a result, foreign investors have pulled out, suspending their financial support and offtake contracts for the facility.
While Arctic LNG 2 faces these restrictions, other Russian LNG projects, like Yamal and Portovaya, continue to operate and supply fuel to Europe and Asia. Sanctioning these facilities could further limit global LNG supply and potentially raise prices, a scenario the U.S. is monitoring closely.
Pyatt emphasized that the U.S. will keep “tightening the screws” on Russia’s LNG exports, although he did not provide details on future sanctions. As the largest LNG supplier, the U.S. has more flexibility in the market, which helps maintain stable supply while implementing these restrictions.
“We’re closely watching where sanctioned Russian cargoes are going, and you can be assured that the Biden administration will continue to tighten measures against Russia’s LNG exports,” Pyatt stated.
The targeted strategy against Russia’s LNG exports has been one of Washington’s few successes in disrupting Russian commodity flows. However, further actions against other LNG facilities will require careful consideration, as they could affect global energy markets and potentially drive prices higher.
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