Summary
In 2022, international sanctions were imposed by the G7 members and other nations in response to Russia’s full-scale aggression against Ukraine. The legal basis for these measures was Russia’s numerous and serious violations of international law, breaches of the fundamental obligation to respect state sovereignty and territorial integrity, and mass atrocities committed in Bucha, Mariupol, and other Ukrainian cities. The sanctions on the Russian energy sector are among the most important, as energy commodities’ exports are the largest source of revenue for the Russian budget.
While sanctions play a vital role in increasing the cost of aggression and punishing the very acts of it, they also bring economic effects, shaping market dynamics. With the restriction of the Russian energy exports, the US received an opportunity to meet the needs that arose on the markets with his own offer. Between 2022-2024, the United States captured approximately €150 billion in nominal terms (€47 billion in real terms) of redirected EU energy imports that previously went to Russia. This represents the U.S. share of a broader market restructuring, with additional volumes going to Norway, Saudi Arabia, Kazakhstan, and other alternative suppliers. For example, EU gas imports from Russia dropped from 45 % in 2021 to 19 % in 2024, and US LNG supplied 45 % of the EU’s LNG imports in 2024.
This shift represents not a temporary disruption, but more structural reconstruction of Transatlantic energy value chains, as it is followed by long-term contracts and new infrastructure investments.. The July 2025 US-EU trade agreement further reinforced this shift, with the EU committing to increase purchases of U.S. LNG, oil, and nuclear fuels. American suppliers of commodities and equipment gained a stronger market position, specifically in Europe, generating additional revenues for the U.S. economy and aligning with the broader national economic and political interests.
Moreover, the Energy Dominance doctrine, formalized through President Trump’s Executive Orders establishing the National Energy Dominance Council (February 2025) and unleashing American energy production (January 2025), depends fundamentally on maintaining robust export markets in Europe.
Throughout 2025, a series of decisions were made by the EU and US to make Russia’s exit from the energy markets inevitable.On July 18, 2025, the EU adopted the 18th package of economic and individual restrictive measures, which includes a full transaction ban on Nord Stream 1 and 2, preventing the completion, maintenance, operation and any future use of these pipelines. The following 19th package included strong energy sanctions like a total ban on Russian LNG, further listing of the shadow fleet, and transaction ban on Rosneft and Gazprom Neft. On October 22, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Rosneft and Lukoil, along with numerous subsidiaries and affiliates, due to ‘Russia’s lack of serious commitment to a peace process’.
The EU and its member states have committed around €300 billion as part of the REPowerEU plan to invest in regasification terminals, pipeline expansions (such as the Trans-Alpine oil pipeline), and diversification projects specifically designed to eliminate energy dependency on Russia. These costs create powerful resistance to policy reversal.However, during the year , narratives about potential sanctions relief emerged in media reports. For instance, investigative reports mentioned discussions between U.S. and Russian representatives about restoring Russian gas flows to Europe, which sparked concerns among European allies and American energy exporters.
While the easing or tightening of sanctions can indeed be used as a lever of pressure on Russia, any opportunities for Russia to return to the oil and gas energy markets will have deeper consequences for all stakeholders involved, including for the United States::
- Economic: Disruption of newly established supply chains and contractual commitments;
- Political: Re-negotiations of agreements and deals among the Transatlantic community;
- Reputational: Corporate exposure to sanctions risks and public backlash;
- Strategic: Renewed threat of Russia using energy as a weapon.
. Although discussions on conditions needed to end the war are important, removing critical restrictions against Russian energy-related projects will inevitably harm the US economic interests and market position of US energy companies in the European Union. It might result in multi-billion losses, should Russian energy resources fully regain their presence in the EU market of fossil fuels. These estimates are not including gains in other energy-related areas: e.g., U.S. firms gained contracts to replace Russian competitors in some nuclear energy projects in the EU.
Our analysis focuses specifically on the economic dimension of energy sanctions policy. Security considerations (NATO cohesion, deterrence of future aggression), legal obligations (accountability for war crimes, respect for international law), and ethical imperatives (solidarity with Ukraine) remain the primary drivers of sanctions regimes but lie beyond the scope of this brief. Thus, policymakers considering any future sanctions adjustment have to account for structural economic constraints, even if other factors were resolved.
Key recommendations to maintain and strengthen energy sanctions as a tool to reinforce long-term Western value chains include:
- Forcing Hungary and Slovakia to completely stop the remaining imports of energy resources from Russia;
- Approval of clear regulation and a plan to phase out Russian gas, with accountability mechanisms for member states;
- Strengthening cooperation between the EU and the US on the gradual reduction of imports of uranium, enriched nuclear fuel, and services from Russia;
- Improving G7 coordination on further sanctions enforcement, including lowering the oil price cap, expanding shadow fleet designations and targeting other evasion schemes.
“We have reached a deal on tariffs and trade with the US. …We will also increase our energy cooperation. Purchases of US energy products will diversify our sources of supply and contribute to Europe’s energy security. We will replace Russian gas and oil with significant purchases of US LNG, oil and nuclear fuels.”
Ursula von der Leyen, President of the European Commission
The EU will double down on America as the Energy Superpower by purchasing $750 billion of U.S. energy exports through 2028. This will strengthen the United States’ energy dominance, reduce European reliance on adversarial sources, and narrow our trade deficit with the EU.
Fact sheet, The White House
This material was prepared by the NGO “DIXI GROUP” with the support of the International Renaissance Foundation as part of the project “Best Energy Security for Tomorrow”. The material reflects the views of the authors and does not necessarily represent the position of the International Renaissance Foundation.