The US has imposed sanctions on Gazprombank - the last major Russian bank still linked to the international payment system SWIFT - which handles energy-related transactions.
New US sanctions against Gazprombank are expected to cause energy costs to skyrocket in some parts of Europe, Finam Financial Group analyst Aleksandr Potavin told TASS on November 22. He predicted that the risk of secondary restrictions will force Russian oil and gas buyers to look for new payment instruments.
On November 21, the US Treasury Department imposed sanctions on more than 50 Russian lending institutions, including Gazprombank and six of its foreign subsidiaries.
The new sanctions have cut one of Russia's largest banks off the SWIFT system, meaning it can no longer conduct transactions in US dollars. Gazprombank's US assets have also been frozen.
“Due to the new sanctions against Gazprombank, foreign buyers of Russian gas and Russian oil will have to look for alternative payment methods that will complicate the whole process, increase risks and make the payment procedure more expensive,” Potavin said.
He pointed out that European buyers could use accounts at other banks or pay for energy supplies in other world currencies as an alternative.
“New sanctions will lead to an increase in Russian oil and gas prices in Europe and the possibility of supply disruptions cannot be ruled out, as all this creates new risks for foreign companies cooperating with Russia,” he explained.
The latest restrictions will not directly affect Russian gas buyers who previously agreed to pay for gas in rubles, according to Alexander Frolov, an expert at the InfoTek energy news center. They will only apply to individuals and legal entities subject to US regulation, he said.
However, the analyst admitted that companies using rubles to buy Russian energy risk secondary sanctions, "so European gas buyers need to look to the US Treasury for clarification."
Russian pipeline gas supplies to Europe have been significantly reduced due to Ukraine-related restrictions and sabotage of the Nord Stream pipeline, although EU countries are still importing record volumes of LNG from Moscow.
Despite its announcement that it would stop buying Russian energy, the EU remains one of the largest buyers of Russian fossil fuels in the world.
In August, pipeline gas accounted for the largest share of the EU's fossil fuel purchases from Russia (54%), followed by LNG (25%) - according to the Centre for Research on Energy and Clean Air (CREA).
