US President Donald Trump complained that the EU is still importing too much Russian oil and that the White House will not put sanctions on Russia unless the EU cuts back on this business.

Trump has a point. Europe is, together with China, India and Turkey, a top Russian fossil fuel customers, far ahead of any other country in the world. In August 2025, the five largest EU importers of Russian fossil fuels paid Russia a combined €979mn for fossil fuels, according to the latest research from Centre for Research on Energy and Clean Air (CREA). Brussels  is currently sending more money to Moscow to pay for fuel than it is sending to Kyiv to pay for the war.

Trump is turning the screws on Europe and wants it to buy more US hydrocarbons. The coalition of the willing Paris summit on September 4 ended in disaster after the EU leaders called Trump to ask for his support for their plans to aid Ukraine in its conflict with Russia. Instead, they got a tongue lashing from the US president, who demanded the EU reduce imports of Russian oil and gas. He said that the US is prepared to impose new sanctions on Russia, but only if the EU follows suit and imposes secondary sanctions on Russia’s customers – specifically 100% tariffs on China and India if they continue to import Russian energy – in addition to reducing the EU’s own imports.

Brussels is unhappy with the demand. It has never imposed secondary sanctions before and European Commission President Ursula von der Leyen said last week that the EU doesn’t use tariffs as a “political weapon.” However, with discussions on the nineteenth sanctions package underway, the EC is considering toughening energy sanctions on Russia because of White House pressure.

Who are Russia’s biggest fossil fuel customers?

The breakdown of Russia’s fossil fuel exports show Asia is Russia’s biggest customer but Europe remains the second most important market despite the sanctions and far ahead of the rest of the world.

Russia has managed to diversify its exports away from Europe to Asia to stay in business, but it remains as dependent on European customers as Europe remains dependent on Russia for supplies.

CREA reported that in August China is Russia’s number one customer for fossil fuels of all types closely followed by India and Turkey with the EU and Korea the only other significant customers.

“China remained the largest global buyer of Russian fossil fuels in August 2025, accounting for 40% (€5.7 bn) of Russia’s export revenues from the top five importers. Crude oil made up the largest share of China’s purchases at 58% (€3.1 bn), followed by coal at 15% (€855mn), pipeline gas at 12% (€676mn), and oil products at 10% (€553mn). India remained the second-largest buyer of Russian fossil fuels, importing a total of €3.6 bn. Crude oil dominated India’s purchases at 78% (€2.9 bn), followed by coal at 14% (€510mn) and oil products at 8% (€282mn),” reports CREA.

“But the EU was the fourth-largest buyer of Russian fossil fuels, accounting for 8% (€1.2 bn) of Russia’s export revenues from the top five importers. The majority of imports, 66% (€773mn), consisted of LNG and pipeline gas, followed by crude oil at 32% (€379mn),” CREA reports.

South Korea became the fifth-largest importer of Russian fossil fuels. Coal dominated its imports at 73% (€413mn), followed by LNG at 21% (€118mn) and oil products at 6% (€33mn).

Oil imports

While imports of crude oil have fallen since the EU imposed the twin oil sanctions at the end of 2022, the EU remains a significant purchaser of piped oil mostly to Hungary and Slovakia. France, the Netherlands and Belgium are also major buyers of LNG, which is not sanctioned by the EU.

The closely guarded exemptions Hungary and Slovakia won on oil imports is a major hole in the sanctions dyke the EU was hoping to build. The two countries remain heavily dependent on the Soviet-era Druzhba oil pipeline and as they are far from the seas and have fewer alternative supply routes.

“Hungary was the EU’s largest importer, purchasing €416mn worth of Russian fossil fuels. This included €176mn of crude oil and €240mn of pipeline gas,” reports CREA. “Slovakia ranked second, with imports totalling €276mn. Crude oil delivered via the Druzhba pipeline made up 74% of the total (€204mn), while pipeline gas accounted for €72mn. The derogation allowing Slovak refineries to process Russian crude into oil products and re-export them to Czechia expired on June 5.”

Gas imports

Gas was never sanctioned and Europe remains hooked on Russian gas supplies, bne IntelliNews reported. France, the Netherlands and Belgium maintain large terminals that can handle the imports of Russian LNG. All in all Russian LNG and piped gas imports still accounted for 15% of EU gas imports in 2024, according to the International Energy Agency (IEA), and can’t be easily replaced. In addition, Hungary and Slovakia still receive piped oil imports via the legacy pipelines.

The EU is still spending just under €1bn a month on importing Russian oil and gas.

“In August 2025, the five largest EU importers of Russian fossil fuels paid Russia a combined €979mn for fossil fuels. Natural gas — unsanctioned by the EU — accounted for more than 61% of these imports, delivered mainly by pipeline or as liquefied natural gas (LNG). The remainder was largely crude oil, which continues to flow to Hungary and Slovakia through the southern branch of the Druzhba pipeline under an EU exemption,” CREA reports.

France was the third-largest buyer, importing €157mn of Russian fossil fuels, all in the form of LNG. However, not all of this gas is consumed domestically — a study shows that some LNG entering through the Dunkerque terminal is subsequently delivered to Germany, CREA reports.

The Netherlands was the fourth biggest importer, importing €65mn of Russian LNG in August, while Belgium, in fifth place, purchased €64mn, also entirely in LNG.

Shadow fleet

Russia has managed to avoid the EU’s oil price cap sanctions by making use of its so-called shadow fleet tankers. However, while the reporting on the shadow fleet emphasis that these tankers are Russian owned (sailing under various flags of convenience) and many are “old”, having passed their useful life dates, the reality is that about half the fleet is Western-owned modern tankers that are insured by Western companies and Western-regulated.

CREA reports that in August 2025, 400 vessels exported Russian crude oil and oil products, of which 125 were designated “shadow” tankers. Thirty-eight shadow tankers were at least 20 years or older. As Sergey Vakulenko, a leading independent energy analyst, pointed out in a paper for Carnegie Endowment for International Peace last year, the historical data on spills does not bear out the assumption that older tankers are more prone to spills. So far there has been only one major oil spill. In December last year two tankers, Volgoneft 212 and Volgoneft 239, broke up during a storm in the Black Sea, causing a major environmental disaster. However, the cause of the accident was not due to the age of the tankers, but the fact they were designed for river transport and couldn’t cope with the rough conditions on the Black Sea.

Moreover, it is Iran that uses the very oldest tankers most heavily, which also suffers from sanctions. Iran does not use any tankers younger than ten years old, and its two largest cohorts are twenty-two and twenty-four years old, while Russia’s vessels are mostly under twenty years old – the traditional upper limits for an age of a tanker- says Vakulenko. In other words, from Russia’s total tanker fleet, less than a third are “shadow fleet” tankers (31%) and less than one in ten (9.5%) are beyond the usual tanker life span.

“In August 2025, just over half (53%) of Russian oil shipments were carried on G7+ tankers, an 8 percentage point decline from July — suggesting a renewed reliance on the ‘shadow’ fleet,” says CREA. “G7+ tankers carried 36% of Russian crude oil exports in August, while the share of ‘shadow’ tankers rose by 11% month-on-month. Oil products, by contrast, remain less dependent on ‘shadow’ vessels, with G7+ tankers transporting 78% of shipments — a marginal increase compared to July.”

Greek tankers make up some 20% of the fleet, according to Reuters, and are allowed to legally carry Russian oil as long as the price per barrel of the Russian Urals blend remains below $60. This year prices have fallen below that level. Urals was trading at $63 per barrel at the time of writing, but with discounts of up to $20 that the Kremlin has been offering (prewar Urals traded at a $2 discount to Brent) it is a simple matter to write contracts with EU registered shipping companies where the nominal price is below the $60 threshold.

As a result, according to CREA, in August a third (36%) of Russia crude oil exports were carried legally by tankers belonging to G7 countries and in the case of oil products a whopping 80% was on board Western ships by August this year.

Even where Russia uses non-EU tankers, the volume of oil that is transferred shit-to-ship inside EU waters is also significant, neatly dodging sanctions. As a result, in August 2025, a quarter of the oil delivered by shadow tankers was transported on tankers currently under sanctions.

 

As bne IntelliNews reported, oil sanctions are a spent cannon. The EU has attempted to close this embarrassing loophole by abandoning the $60 oil price cap and as part of the eighteenth sanctions package introduced a new floating rate oil price sanctions cap of 15% below market rates for the Urals blend. That came into effect on September 3 and drops the cut off price for a barrel of oil to just over $47. The results are yet to be seen, but presumably the volume of oil and products carried by G7 ships will fall dramatically. However, shipping companies told the Financial Times that they were sure they would still be able to find workarounds.

As bne IntelliNews reported, the oil price cap relates to the market rate at the start of the journey, but writing the contracts naming the “free on board” price that excludes transport and service costs, which are charged separately at the end of the journey, allows for an accounting price quote which is much lower and so in keeping with the letter of the sanctions.

At the same time the US did not endorse the new floating rate, and it remains to be seen if it will enforce the rule on its own tankers.

EU is Russia’s biggest gas customer

The efforts to cut Russia’s oil exports to Europe are in full swing and has led to constant clashes in Brussels between Hungary and Slovakia with the European Commission (EC) leadership. But in the case of gas, the EU is still unabashedly Russia’s number one customer.

The EU was the largest buyer of LNG in August, purchasing 50% of Russia’s exports, followed by China (21%) and Japan (18%), says CREA. The EU was also the largest buyer of piped gas, purchasing 35% of Russia’s pipeline exports, followed by China (30%) and Turkey (28%).

Even though the Nord Stream 1&2 gas pipelines have been shut down since 2022, Russian exports of LNG have boomed and replaced almost all the 150bn cubic metres (bcm) that Gazprom used to send to Europe each year. accounting for up to 40% of Europe’s gas supplies. Last year, Russian gas still accounted for around 15% of Europe’s gas imports, according to the International Energy Agency (IEA).

Oil and gas sanctions were supposed to cut the Kremlin off from its hydrocarbon revenues used to fund the war. The Russian sanctions have largely failed to bring the Russian economy to its knees, but its buffers are being eroded as its economic problems are getting worse this year. Nevertheless, Europe is helping by importing more than twice as much LNG as China, Russia’s next biggest customer, and about 10% more piped gas this August.

CHART

 

The EC is well aware of this embarrassing dependency and has floated to a plan to end all Russian gas imports completely by 2028. However, as LNG remains a young business and several major new LNG projects in Qatar and the US are only due to come online in 2027 and the outlook for supplies remains uncertain.

Trump clearly has his eye on obtaining an even larger share of the European energy market. As part of his tariff negotiations with European Commission President Ursula von der Leyen earlier this year, he got the president to agree, in principle, to increase EU imports of US energy to €750bn over the next three years, a deal some analysts called delusional. As bne IntelliNews reported, the EU has ended its dependency on Russian gas, but has already replaced it with a dependency on American LNG.

In the meantime, imports of Russian gas are going up, not down, as Europe races to fill storage tanks to 90% full before the November 1 deadline, having started this year with 5% less gas in storage at the end of the last heating season than normal. The EC is caught on the horns of wanting to buy less Russian gas but needing more. Russian pipeline gas revenues are not going down, but increased by 8% to €75mn per day in August while the volumes also increased by 10% month-on-month, reported CREA.