A new U.S. sanctions law could put the specialized fleet that keeps Russia’s Yamal LNG project operating in the Arctic under unprecedented pressure, potentially forcing European shipping companies and service providers to confront unexpected sanctions exposure.
The Lindsey O. Graham Sanctioning Russia and Iran Act, signed into law by President Donald Trump on Friday, directs the president within 30 days to review potentially covered persons and, if he determines that a person meets the statutory criteria, impose sanctions on that person. Those criteria include a principal shareholder with a controlling or majority interest in the Yamal LNG project.
That provision directly implicates Novatek, which owns 60% of Yamal LNG and is the project’s controlling shareholder. The law separately gives the president discretion to sanction foreign vessels used to transport Russian energy or other goods for sanctions evasion.
The distinction could be critical for Yamal’s maritime supply chain. While vessel designations remain a presidential determination, the provision covering qualifying shareholders is written as a mandatory sanctions measure once the statutory criteria are met, subject to the law’s national-interest waiver mechanism.
Any waiver would require the administration to justify its decision to Congress. The legislation passed the Senate 86-11 and the House 262-159, giving the waiver question a potentially significant political dimension.
For Yamal LNG, the timing is particularly problematic because the project depends on a small fleet of highly specialized Arc7 icebreaking LNG carriers. Ships operated by Seapeak and Greek-linked Dynagas account for the largest share of the fleet, while Mitsui O.S.K. Lines operates additional vessels. The ships were purpose-built for year-round navigation from Yamal’s Sabetta terminal through Arctic ice and cannot easily be redeployed to conventional LNG trades.
The new U.S. law raises questions that go beyond whether individual vessels are designated. Shipping companies could face increased sanctions and compliance risks when performing chartering, management and other services for a project whose controlling shareholder is subject to U.S. sanctions.
The same uncertainty extends to insurers, banks and shipyards. Danish shipyard Fayard has become the last major European facility servicing Yamal’s Arc7 fleet after other Western yards withdrew from the business. If Yamal or Novatek becomes subject to blocking sanctions, European companies would have to determine whether continued maintenance, insurance or other services expose them to U.S. sanctions risk.
The development also potentially undercuts a workaround negotiated by Greece in the European Union’s 21st sanctions package. Athens had pushed for an exemption allowing European operators to continue transporting Russian LNG to third countries after the EU’s ban on Russian LNG imports takes effect. That exemption was important for Dynagas, whose specialized Arc7 ships are heavily tied to Yamal.
Until now, Novatek had been preparing for the European market to disappear rather than for its Yamal LNG shipping network to become sanctioned. The EU is due to prohibit Russian LNG imports under long-term contracts from Jan. 1, 2027, requiring Yamal LNG to redirect more cargoes toward Asia and use conventional LNG carriers after transshipment.
Novatek has also been building up a fleet of conventional and ice-capable LNG carriers to support that transition.
The U.S. law could bring that deadline forward by at least two months.
Instead of facing primarily a change in destination markets next winter, Yamal LNG could face an even more critical question: whether the Western-operated ships, insurers and service companies that have kept the project running largely outside the sanctions regime for more than four years can continue supporting the operation.
That could make Yamal increasingly resemble the sanctions-hit Arctic LNG 2 project, where restrictions on vessels and Western technology have severely constrained commercial operations.