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Experts warn US sanctions against Gazprombank could push gas prices up in Europe

Alexander Frolov, deputy director general of the Institute of National Energy, stressed that the new restrictions do not directly impact buyers of Russian gas who pay for it in rubles

MOSCOW, November 22. /TASS/. US sanctions against Gazprombank may force foreign countries that buy Russian oil and gas to seek alternative payment methods due to the risk of secondary sanctions, leading to higher costs, experts interviewed by TASS said, adding that in Europe specifically, these sanctions could also drive up the cost of Russian hydrocarbons.

"After the introduction of new sanctions against Gazprombank, foreign buyers of Russian gas and oil will have to look for payment alternatives. They might find some new avenues for transferring the funds, for example, through accounts in other banks or using other world currencies. But this complicates the process, increases risks and makes the payment procedure more expensive," said Alexander Potavin, an analyst at FG Finam.

"In this situation, the new sanctions will lead to a surge in prices for Russian hydrocarbons in Europe, and supply disruptions cannot be ruled out, since all this creates new risks for foreign companies working with Russia," Potavin believes.

Deputy Director General of the Institute of National Energy, and expert at the InfoTEK analytical center, Alexander Frolov, stressed that the new restrictions do not directly impact buyers of Russian gas who pay for it in rubles, only those individuals and legal entities under the jurisdiction of the United States. However, he admitted the risk of secondary sanctions against such companies, "therefore, buyers of gas from Europe will contact the US Department of the Treasury for clarification." It is important to remember that general licenses for such sensitive activities as energy trading envisage temporary (but renewable) exceptions from sanctions restrictions, the expert added.

The Hungarian Ministry of Foreign Affairs and Foreign Economic Relations told TASS that the introduction of US sanctions against Gazprombank will not hinder reliable gas supplies from Russia to Hungary. The Hungarian Foreign Ministry also noted that, if necessary, they would consult with Gazprom on this topic.

On Thursday, the US Department of the Treasury announced a new package of anti-Russian sanctions, which targets dozens of individuals and legal entities. This time, Gazprombank, which was not previously subject to sanctions, has also been hit by the restrictions. The bank announced that the sanctions would not affect its operation, and it continues to serve clients and conduct transactions on financial markets as usual.

Earlier, TASS reported citing Eurostat data and its own calculations, that in September the European Union purchased Russian pipeline gas for 840 million euros, the most since February 2023. LNG imports from Russia in value terms were the largest since April 2024. Italy, Hungary, Greece and Slovakia were the biggest buyers of Russian pipeline gas. In total, in January-September 2024, the European Union paid 5.4 billion euros for Russian pipeline gas and 4.9 billion euros for LNG.