US sanctions on Arctic fuel projects are dangerous for global energy

Moscow/Washington: The Russian Foreign Ministry has condemned the United States for imposing sanctions on Russian energy projects in the Arctic, deeming it unacceptable and dangerous to global energy security. A few days ago, the US had announced new sanctions against Russia. It included Russia’s energy sector as well as the diamond sector. In the aftermath of these sanctions, foreign companies engaged in Arctic projects have opted to withdraw.

Russia has invested heavily in energy projects in the Arctic region. Russia has initiated two major energy projects, ‘Yamal’ and ‘Sakhalin,’ with the liquefied natural gas (LNG) extracted from these projects being exported to both European and Asian countries. Russia ranks fourth among the countries producing LNG internationally. Russia’s share in global LNG production is about eight percent.

To enhance its share in the global energy market, Russia has underscored the development of the Arctic energy sector and has successfully established an international ‘consortium’ for this purpose. In collaboration with Russia’s ‘Novatek’ company, firms from France, China, and Japan are participating in the ‘Arctic LNG 2‘ project. This project, with an estimated cost of about $21 billion, is expected to see investments of 40 percent from companies in these three countries.

However, this project is encountering challenges due to the sanctions imposed by the United States. In addition to France and Japan, two Chinese companies have declared their withdrawal from the project. Due to the withdrawal of international companies, there are indications that Novatek Company will now have to run this entire project alone. LNG export from this project was to start in the first quarter of next year. However, the US has already created problems for Russia by imposing sanctions before that. The media have indicated that the European Union will follow the US and declare a ban on this project.

In response to this development, Russia has expressed strong dissatisfaction. Russian Foreign Ministry spokesperson Maria Zakharova indicated that the United States has again taken a unilateral decision and employed sanctions as a weapon. The Russian spokesperson also asserted that the US’s decision could lead to a potential energy imbalance in several countries.

Following the commencement of the Russia-Ukraine war, Western nations, including the United States, implemented extensive sanctions on Russia’s energy sector. However, Russia has reportedly achieved success in mitigating the impact of these sanctions. A senior Russian official recently disclosed that the country’s income from the energy sector has rebounded to pre-war levels.

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