Eni CEO urges EU to suspend 2027 Russian LNG ban amid Middle East supply risks

Claudio Descalzi, the Chief Executive of Italian energy major Eni, has called for a suspension of planned restrictions on Russian liquefied natural gas (LNG) imports, citing the ongoing conflict in the Middle East and the impact of naval blockades in the Strait of Hormuz.

Speaking to the Italian newspaper Corriere della Sera, Descalzi provided an assessment of current developments within global energy markets and their implications for European security.

Referring to the timeline established by the European Union (EU), Descalzi stated: “I believe it is necessary to suspend the ban on Russian LNG shipments, which involve a volume of 20 billion cubic meters and are scheduled to take effect on January 1, 2027.”

Under existing EU regulations, a comprehensive ban on the import of Russian natural gas was enacted in February. According to the current schedule, the bloc aims to completely halt Russian LNG supplies by January 1, 2027, followed by a total cessation of pipeline gas deliveries by September 30, 2027.

The Eni CEO justified his request for a postponement by pointing to the decline in shipments originating from the Middle East, which he warned poses a significant risk to the supply-demand equilibrium in Europe.

Addressing the regional crisis, Descalzi noted that while 6.5 billion cubic meters of gas previously arrived from Qatar, the company is working to fill this gap. “We will substitute this shortfall with supplies from Angola, Nigeria, Congo, and the US,” he said.

Descalzi also highlighted that Europe consumes approximately 60 million tons of jet fuel annually, 35% of which is imported. In the current environment, he noted the urgent need to determine how these resources will be secured and at what cost.

Descalzi issued a warning regarding potential diesel fuel shortages across Europe, drawing attention to recent incidents within Eni’s own retail network.

“Last weekend, 600 of our stations ran out of diesel,” the Chief Executive disclosed. “This was our mistake; because we kept prices very low, stocks were depleted rapidly. However, the exhaustion of diesel at 600 stations points to a potential systemic problem.”

Descalzi suggested that the maritime blockade of the Strait of Hormuz, as declared by US President Donald Trump, would further exacerbate these deficits. He estimated that a potential embargo could result in the withdrawal of 1.5 million barrels of oil per day from the market.

He recalled that Iran managed to export this volume primarily to China during the 44 days of active conflict, a situation he believes could accelerate the global race for oil acquisition.

Descalzi observed that prices in the physical oil market in Asia have reached $150 per barrel. “Cargoes go where they are sold at the highest price; therefore, this is a matter of volume rather than price,” he evaluated.

The head of Eni—which ranks among Europe’s largest energy companies alongside Shell, BP, TotalEnergies, and Equinor—also referenced data concerning Italy’s reduced reliance on Russian energy.

At the start of 2022, Russia supplied 40% of Italy’s natural gas requirements. By April of last year, that share had fallen to approximately 10%.

In the spring of 2023, Eni initiated arbitration proceedings against Gazprom following a reduction in deliveries under existing contracts. Gazprom attributed the disruptions to technical issues involving transit through Austria.

Russian President Vladimir Putin stated in March that Moscow remains open to cooperation with Europe on oil and gas supplies, though he emphasized that such a move would require a signal of interest from the European side.

Putin did not rule out the possibility of a total withdrawal from the European market ahead of new restrictions, suggesting that establishing a presence in alternative markets might prove more profitable for Russia.