G7 leaders commit to tighten Russian oil, gas sanctions

The leaders of the G7 group of countries have pledged to ratchet up restrictions on Russia's hydrocarbon sector in an effort to further pressure President Vladimir Putin to end the war in Ukraine, bolstered by the recent easing of tensions in the Persian Gulf and expected reopening of the Strait of Hormuz, the heads of state said in a joint statement on June 17 following their summit in Evian, France.

"We commit to increase the pressure on the Russian war economy," they said in the statement. "In this context, we will strengthen our sanctions, including those on the oil and gas sectors. We consider this the right moment to proceed with additional measures, as President Trump has delivered a deal that we support in reopening the Strait of Hormuz."

G7 countries, which include the US, the UK, Canada, France, Germany, Italy and Japan, coordinated closely on Russian energy restrictions in the first years after Moscow's full-scale invasion of Ukraine in 2022, but sanctions policies have splintered in recent years.

In the wake of the conflict in the Middle East, the US has relaxed some of its Russian oil sanctions to allow countries to purchase product already at sea, with the latest exemption expiring June 17. The UK also watered down planned measures targeting Russian crude refined abroad, but has joined the EU in enforcing tougher clampdowns on shadow tankers in recent weeks.

Initially, the G7's flagship sanctions policy involved a joint commitment to ban Russian oil imports in 2022-23 and to cap the price of oil deemed acceptable for shipment to other countries.

However, subsequent efforts to reduce the cap from its initial threshold have split the group. Today, only the US is enforcing the $60/barrel limit originally agreed in 2022, after resisting a push for coordinated action in 2025. In contrast, the UK, Canada and Japan have cut the threshold to less than $50/b.

In February, the EU went further by proposing a full maritime services ban on Russian crude shipments, a policy that would effectively supersede the price cap. However, it stopped short of passing the legislation, declaring its preference for coordinated G7 action. The UK has supported a maritime services ban in principle and suggested it would go further to include refined products.

G7-linked tankers have recently been responsible for supporting around a third of Russia's crude exports, according to S&P Global Commodities at Sea and Maritime Intelligence Risk Suite data.

Countries have also taken different approaches to Russia's main oil buyers, such as India and China, which have been pivotal to keep the country's hydrocarbons flowing.

The EU and UK have both sanctioned specific refiners and banned imports of fuel made by processing Russian crude abroad. On the other hand, the US has preferred to use punitive tariffs to target Moscow's main trade partners, notably India.

Gas measures

On the gas side, several G7 members have recently moved to escalate restrictions on Russia's export industry with measures largely focused on constraining shipping capacity.

The UK's Foreign Commonwealth and Development Office added four more Russia-linked LNG tankers to its sanctions list on June 16. The vessels had recently begun servicing Novatek's sanctioned Arctic LNG 2 facility, which has been consistently exporting blacklisted cargoes to China's port of Beihai since last summer.

The European Commission, meanwhile, has proposed restrictions on the resale of LNG tankers to Russia as part of its next sanctions package against Moscow, which still requires the unanimous approval from member state representatives.

The EU already passed a ban earlier this year, phasing out all Russian gas and LNG imports by late 2027. The UK banned the import of Russian LNG shortly after Russia's 2022 invasion of Ukraine.