Intensified sanctions targeting Russian and Iranian shadow fleets; EU agrees to phase out Russian gas imports

In this sanctions alert, we provide you with the key takeaways of the new measures imposed in the EU, UK and the US.

EU sanctions 50 shadow fleet enablers 

The Council of the EU has imposed sanctions on 50 additional targets in two separate actions this month. On 15 December 2025, the Council sanctioned five individuals and four entities responsible for supporting Russia's shadow fleet and value chain. The entities targeted include shipping companies based in the United Arab Emirates, Vietnam, and Russia which own or manage tankers that transport crude oil or petroleum products whilst practicing deceptive shipping practices. 

Three days later, on 18 December 2025, the Council sanctioned 41 additional vessels belonging to Russia's shadow fleet. Five vessels were designated for transporting stolen Ukrainian grain and cultural goods from occupied territories, and the remaining 36 vessels were designated for transporting Russian crude oil and petroleum products whilst practicing deceptive shipping practices. 

These latest actions bring the total number of EU-designated vessels to nearly 600 and the overall number of individuals and entities sanctioned in response to Russia's military aggression against Ukraine to over 2600. 

The US Treasury increases pressure on Iran's shadow fleet 

On 18 December 2025, OFAC placed further pressure on the Iranian shadow fleet by targeting 29 shadow fleet vessels and their respective management firms that have transported Iranian petroleum products through deceptive shipping practices. The designated vessels include those used to transport Iranian crude oil and various petroleum products, including fuel oil, bitumen, naphtha, and condensate, and are owned and operated by companies established in various jurisdictions largely for the sole purpose of owning and managing their respective vessels. 

Washington prepares a fresh round of sanctions 

Washington is reportedly preparing a fresh round of sanctions on Russia's energy sector to increase pressure on Moscow should President Putin reject a peace agreement with Ukraine. The measures under consideration include targeting additional vessels in Russia's shadow fleet, as well as traders who facilitate the transactions. 

EU reaches agreement to phase out Russian gas 

On 3 December 2025, the Council presidency and the European Parliament reached a provisional agreement on a regulation to permanently phase out imports of Russian natural gas. The regulation introduces a legally binding, stepwise prohibition on both liquefied natural gas (LNG) and pipeline gas imports from Russia, with a full ban from the end of 2026 and autumn 2027, respectively. 

Denmark's minister for climate, energy, and utilities, Lars Aagaard, stated that "[w]w have to put an end to EU's dependence on Russian gas, and banning it in the EU permanently is a major step in the right direction". 

Key elements include: 

• For short-term supply contracts concluded before 17 June 2025, the prohibition applies from 25 April 2026 for LNG and 17 June 2026 for pipeline gas
• For long-term LNG contracts, the prohibition applies from 1 January 2027
• For long-term pipeline gas import contracts, the prohibition takes effect on 30 September 2027 (or at the latest 1 November 2027)
• Prior authorisation regime for gas imports to ensure effective enforcement
• Mandatory national diversification plans for member states
• Effective, proportionate, and dissuasive penalties for non-compliance

The provisional agreement must now be endorsed by the Council and the Parliament before formal adoption.