EU Commission considering legal options to allow breaking Russian gas contracts without penalties; exploring ban on new contracts.

AinvestTuesday, Apr 22, 2025 12:07 pm ET
1min read

EU Commission considering legal options to allow breaking Russian gas contracts without penalties; exploring ban on new contracts.

The European Commission is considering legal measures to allow European companies to break long-term gas contracts with Russia without facing penalties, according to recent developments. This move is part of the bloc's broader strategy to reduce its dependence on Russian gas imports and explore new energy sources, particularly from the United States [1].

The EU's plan to phase out Russian fuel purchases is set to be unveiled on May 6, with the European Council President, Antonio Costa, emphasizing the need for European companies to increase their purchases of liquefied natural gas (LNG) from the US. The bloc has been actively seeking to diversify its energy suppliers, with the US currently being the third-largest supplier of gas to the EU [1].

The EU Commission is exploring various legal options, including the use of trade measures such as quotas or tariffs at the EU level, to facilitate the breaking of long-term contracts with Russia. While sanctions against the import of Russian gas could theoretically allow EU buyers to declare force majeure and halt purchases, the EU has not yet proposed this measure due to the lack of unanimous support from member states like Hungary and Slovakia [1].

The roadmap being developed by the European Commission aims to provide European companies with tools to break their long-term contracts with Russia. The Commission is also considering a potential ban on new contracts with Russia, further emphasizing the bloc's commitment to reducing its dependence on Russian gas [1].

These measures come at a time when the EU is also exploring the possibility of reaching an agreement with the US to resolve a trade dispute. US President Donald Trump has repeatedly urged Europe to buy more American energy supplies to avoid potential tariffs [1].

In conclusion, the EU's efforts to diversify its energy sources and reduce its reliance on Russian gas are likely to have significant implications for the global energy market. The legal measures being considered by the EU Commission could provide European companies with the flexibility they need to adapt to changing market conditions and explore new energy opportunities.

References:
[1] https://newsukraine.rbc.ua/news/eu-unveils-plans-to-phase-out-russian-gas-1744981406.html