Expert Yushkov does not expect a disaster: “There is no difference for the budget”
In the agreed but not yet published 14th package of EU sanctions, two measures stand out. The first – This is a ban on transshipment in European ports of Russian LNG intended for delivery to other regions of the world. Second – a ban on the access of tankers with Russian oil (the “shadow fleet”) to EU ports. In words, the new restrictions sound menacing, but, according to domestic analysts, they are more of an image rather than a practical nature, and will have a minimal impact on our country’s export revenues.
Who are the new sanctions hitting? The main destination for re-export of Russian liquefied natural gas in Europe is China, to a much lesser extent – India and other Asian countries. According to the Belgian daily Le Soir, one of the goals of the sanctions – make it difficult for Russia to supply from the Arctic, from where LNG is transported on icebreaker tankers in the winter months. Another task – contain the rise in spot prices for LNG on the European continent, preventing Russian raw materials from leaving the region. The sanctions restrictions included in the 14th package will be finally approved at a meeting of the EU Foreign Affairs Council on June 24. The package will come into force on the same day. The key question is: how painful will it be for our country?
“As for sanctions against the “shadow fleet,” we are talking about legislative fixation of the realities already established in the market,” says Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation. – Tankers with Russian oil have deliberately not entered the ports of European Union countries since December 5, 2022, and tankers with petroleum products – from February 5, 2023, the date when the corresponding Brussels embargo on the supply of raw materials by sea came into force. Today they are served mainly in Russian and Asian ports, because, among other things, they ignore the price ceiling of $60 per barrel introduced by the West. Accordingly, if even one such ship entered a European port, it would be treated as a violator of the sanctions regime.
— We need to wait for the final document and study the wording. If we talk only about a ban on transshipment, this means that the Europeans will try to lock up Russian LNG on their domestic market. In order to saturate it even more and, accordingly, bring down spot prices. The fact is that part of the liquefied gas comes to Europe from the Russian Federation on ice-class tankers (for example, from Yamal), there it is reloaded onto ordinary tankers and goes to Asian markets. Even if the ban comes into force, raw materials will still find their way to Asia. Firstly, from June to the end of October the eastern part of the Northern Sea Route is open, and secondly, it is possible to reload LNG directly into the sea — from ship to ship. This is still happening — mainly in the Murmansk region, sometimes in the waters of Norway. The method is not the most effective, but it works. Therefore, I don’t see anything catastrophic.
— In this case, the Europeans themselves will suffer economically and financially, first of all. They will have to look for similar volumes in alternative markets – in the USA or Qatar and, accordingly, have to deal with higher prices and pay more to suppliers. As for Russia, I don’t see any particular negative effect on the federal budget: European sanctions will mainly affect three projects – the only large-capacity «Yamal-LNG» and two medium-tonnage – this is the project «Cryogas-Vysotsk» «NOVATEK» and «LNG Portovaya» «Gazprom». Being a very complex and expensive project, Yamal LNG received enormous tax benefits, without which it would not have taken place at all. He was given a zero mineral extraction tax rate on gas and gas condensate for a twelve-year period, that is, all taxes were either zeroed out or reduced. Here and now he actually pays nothing to the state. Accordingly, whether he earns more or not, how sanctions will affect his income, now there is no difference for the budget.