The European Union's latest sanctions package against Russia has hit an unexpected obstacle: Greece. Athens is demanding an exemption to the bloc's full ban on Russian liquefied natural gas (LNG), scheduled to take effect on 1 January 2027. The demand has angered other member states, with one diplomat describing it as 'shameless'.
Greece's LNG Gambit
Greece, home to the world's largest merchant fleet, wants to continue transporting Russian LNG to non-EU customers worldwide. The country does not seek to import the fuel for its own use but to preserve the lucrative shipping business. Greek officials argue that banning transit would be 'all pain, no gain' because Moscow would simply redirect cargoes to Chinese vessels, leaving Russia's energy revenues untouched. This mirrors arguments Athens used earlier this year to block a full ban on maritime services for Russian oil tankers.
At the centre of the dispute is Dynagas, a company owned by Greek billionaire George Prokopiou. Dynagas has chartered 11 vessels, including seven Arctic-resistant icebreakers, to Russia's Yamal LNG facility, the country's largest LNG producer. The firm warns that the 2027 ban could trigger significant revenue losses, adverse material effects, and even defaults on debt agreements. Its icebreakers, it says, would become useless without Yamal.
Other member states are aghast at Greece's attempt to retroactively challenge a legal text unanimously endorsed in October. The ban was designed to strengthen the EU's phase-out of Russian gas and allow private operators to invoke force majeure to break long-term contracts. 'Shameless,' a diplomat said, reflecting widespread frustration. Some diplomats believe Greece has shown a much lower tolerance for economic hardship than the rest of the bloc, which has accepted greater sacrifices to reduce ties with Russia.
Ripple Effects on the Sanctions Package
The Greek blockage has endangered another key element of the sanctions package: the price cap on Russian oil. Currently set at $44.10 per barrel, the cap must be adjusted every six months to remain 15% below the average market price. Since Russian oil prices surged after the closure of the Strait of Hormuz, the revision would raise the cap to $58 per barrel, giving the Kremlin breathing space at a time when Ukraine is gaining momentum on the battlefield. The European Commission considers this unacceptable and has proposed delaying the review until January 2025 to keep the cap at $44.10.
Negotiations have been chaotic. The review was initially scheduled for 15 July but was postponed to 23 July as tensions over LNG dragged on. Some elements, such as banking, crypto, and the shadow fleet, have been finalised, while others, including fisheries and sanctions on Patriarch Kirill, have been abandoned. The entry ban on Russian soldiers has been downgraded yet again, with France and Italy raising concerns about administrative burdens and legal responsibility for consular services. The ban will not apply until member states are convinced it will work. A similarly ambivalent wording has been used to placate Austria over its request to lift sanctions on Rasperia, a blacklisted investment company, to offset a €2.1 billion loss incurred by Raiffeisen Bank International in Russia.
As one diplomat put it: 'It's really a dilemma. I am glad I'm not the Greek prime minister.' The standoff underscores the difficulty of maintaining unity among 27 member states with divergent economic interests. For more on Greece's role in EU security, see Greece Blocks EU Sanctions on Russian LNG, Djibouti Visit Signals EU Security Ambitions. The broader context of EU sanctions on Russia is explored in EU Sanctions on Russia Hinge on LNG Transit Ban as Deadline Looms.
