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The European Union adopted a new sanctions package on Russia over the war in Ukraine on Monday, which for the first time includes measures seeking to limit Russia's ability to ship liquefied natural gas around the world.
Measures will prohibit the shipment of Russian LNG to European Union ports for the purpose of forwarding it to third countries, including both ship-to-ship transfers and ship-to-shore transfers.
The EU action will prohibit new investments and the supply of goods, technology and services for the completion of Russian LNG projects under construction, such as Arctic LNG 2 and Murmansk LNG.
The package also includes new sanctions on entities that make up the “dark fleet” of ships used to avoid the Russian oil price ceiling set by Group of Seven nations.
The transshipment ban will likely mean that Russian players will have to resort to longer sea routesKepler analysts said recently.
Russia is the EU's second largest LNG supplier after the United States; To date, the EU has received 43.1 million metric tons of LNG, of which 21% comes from Russia and 44% from the US.
In the US, natural gas futures rose for the first time in three sessions, with the Nymex July front-month contract (NG1:COM) closing. +3.9% at $2,811/MMBtu.
ETF: (NYSERCA:UNG), (BOIL), (COLD), (UNL), (FCG)
After discounting the return of some restricted production, “the market appears to be refocusing on the demand side, where widespread high temperature trends are now extending into the second week of July,” the analysts said. Ritterbusch, largely attributing the upward trend towards constant reduction of excess storage.
“We expect the surplus to narrow to about 410-425 Bcf by the end of next month,” Ritterbusch said, according to Dow Jones. “While this would still represent a considerable supply cushion, an expected active hurricane season may require additional discounts.
