The European Commission(EU) has proposed a plan to phase out all Russian gas imports by the end of 2027, as part of its efforts to put more pressure on Russia to secure a real ceasefire and end the war in Ukraine. According to Commission President Ursula von der Leyen, “To achieve peace through strength, we must put more pressure on Russia to secure a real ceasefire, to bring Russia to the negotiating table, and to end this war. Sanctions are critical to that end.”
The plan, unveiled at the end of the Group of Seven summit in Canada’s Kananaskis resort, would immediately ban new contracts to buy Russian gas, allow existing short-term contracts to run their course by next June, and cut short any long-term contracts at the end of 2027.
This move comes as Russia unleashed a massive attack on Kyiv, killing 26 people and injuring 134, just as the plan was unveiled. Ukrainian Foreign Minister Andrii Sybiha condemned the attack, saying, “Putin is doing this deliberately – right during the G7 summit. It’s a clear signal of total disrespect toward the United States and other partners calling for an end to the violence.”
The European Union has dramatically reduced its imports of Russian energy during the war, cutting imports by almost 80 percent. However, it still spent about 22 billion euros ($25 billion) buying 19 percent of its gas and about 3 percent of its oil from Russia last year. By eliminating this revenue, the Kremlin would be deprived of 22 percent of its gross revenues, according to the Centre for Research on Energy and Clean Air.
Hungary and Slovakia have been the main holdouts, arguing against an outright import ban due to their reliance on Russian oil and gas. Slovak premier Robert Fico even called Ukrainian President Volodymyr Zelenskyy “an enemy of Slovakia” in January. Despite this opposition, the EU has banned Russian coal and oil imports since 2022 and has planned to ban gas.
The EU and G7 launched a $60 per barrel price cap on Russian oil sold to anyone else in the world in December 2022. However, Estonian former premier Kaja Kallas, now the EU’s foreign policy chief, noted that a price between $30-40 would substantially hurt Russia. Ukraine’s President Zelenskyy agreed, saying, “If Russian oil is sold at no more than $30 a barrel, then Moscow will suddenly sound peaceful.”
Russia has partly circumvented the oil cap by purchasing a “shadow fleet” of tankers not insured in EU and G7 countries. In response, the UK sanctioned 20 tankers, and Australia imposed restrictions on 60 vessels. US Republican Senator Lindsey Graham announced that he and Democrat Richard Blumenthal are working with the Trump administration to finalize a sanctions package that would impose secondary sanctions on countries that still import Russian energy.
The EU is also considering transferring about 200 billion euros in frozen Russian assets from the Euroclear system in Belgium to a “special purpose fund” to support Ukraine. Currently, Euroclear can only invest through the Belgian central bank, which offers low returns. The new fund would allow for riskier investments, potentially increasing income directed to support Ukraine.
In the midst of these developments, Russia has continued to assault Ukrainian positions, making tiny gains at a great cost to life. Britain’s Defence Intelligence estimated that Russia had suffered a million casualties in the war, with 40-50 percent likely irrecoverable losses. The Institute for the Study of War found that Russian casualties have roughly doubled each year of the war, averaging 1,286 daily casualties this year.