The critical cog in Putin’s machine and how British firms help to keep Russian gas flowing into Europe
This is the story of how an obscure company based in an office block on a quiet street in Glasgow became an accessory in Vladimir Putin’s war on Ukraine. It is the story of how Europe and Russia remain locked in a tense relationship of economic dependence, even as they supposedly cut their ties. It is the story of the uncomfortable truth behind why the cost of living crisis came to an end.
But before all of that, it is the story of a ship – a very unusual ship indeed.
If you ever spot the Yakov Gakkel as it sails through the English Channel or the Irish Sea (I first set eyes on it in the Channel but at the time of writing it was sailing northwards, about 20 miles off the coast of Anglesey) you might not find it all that remarkable.
At first glance it looks like many of the other large, nondescript tankers and cargo vessels passing these shores. Its profile is dominated by an enormous blue prow which reaches high out of the water and ends, 50 metres further back, at its unexpectedly angular stern.
Yet the ship’s slightly odd shape – all hull and barely any deck – is the first clue about what makes the Yakov Gakkel so special. Because this is one of the world’s most advanced liquefied natural gas (LNG) tankers, with an unusual trick up its sleeve.
The Yakov Gakkel tanker
LNG tankers are extraordinary ships, with insides so cleverly engineered they are capable of holding vast amounts of natural gas at temperatures of approximately −163C.
For all that the world is embracing renewable energy, natural gas remains one of the most important energy sources, essential for much of Europe’s heating and power, not to mention its industries. For the time being, there is no cheap way of making many industrial products, from glass and paper to critical chemicals and fertilisers, without gas.
Once upon a time, moving natural gas from one part of the world to another necessitated sending it down long, expensive, vulnerable pipelines, meaning only countries with a physical connection to gas producers could receive this vital fuel. But LNG tankers like the Yakov Gakkel are part of the answer to this problem, since they allow gas producers to send it by sea to anywhere with a terminal capable of turning their supercooled methane back into the gas we use to heat our homes and power our grids.
Politicians in Europe promised to end the continent’s reliance on Russian gas
But the Yakov Gakkel can also do something most other LNG tankers cannot, for that enormous blue double hull allows it to carve through ice, enabling it to travel up into the Arctic Circle and back even in the depths of winter.
And that is precisely what this ship does, more or less constantly: travelling back and forth between Siberia and Europe, through winter and summer, bringing copious volumes of gas from Russia to Europe. It is part of the explanation for how Europe never ran out of gas, even after the Russian invasion of Ukraine.
This is not, it’s worth saying, the conventional wisdom. Back when Russia invaded Ukraine, European policymakers declared they planned to eliminate the continent’s reliance on Russian gas – which accounted for roughly a third of their supplies before 2022.
And many assumed that had already happened – especially after the Nord Stream pipeline, the single biggest source of European gas imports, was sabotaged in late 2022. But while volumes of Russian pipeline gas into Europe have dropped dramatically, the amount of Russian LNG coming into Europe has risen to record levels.
LNG tankers sail between Siberia and various ports in Europe, including Zeebrugge
Russia helps Europe replenish gas stores
Today, Europe still depends on Russia for around 15% of its gas, an ever-growing proportion of which now comes in via the sealanes, on tankers like the Yakov Gakkel. And while the US has stepped in to make up some of the volumes lost when those pipelines stopped, only last month Russia overtook the US to become the second biggest provider of gas to the continent. It’s further evidence that those LNG volumes carried on ships through the North Sea, the Irish Sea and the English Channel, are increasing, rather than falling.
This Russian gas has helped Europe replenish its gas stores, it has helped keep the continent’s heavy industry going throughout the Ukraine war. And this dependence has not come cheap: the total amount Europe has paid Russia for LNG since 2022 comes to around €10bn.
The continued presence of Russian gas running through European grids is at least part of the explanation for why European energy prices have fallen so sharply since those post-invasion highs. Back then, many in the market were pricing in a complete end of Russian gas supply to Europe – something that would have had disastrous consequences. But it never actually happened.
Perhaps this explains why the continent’s politicians have, so far, stopped short of banning imports of Russian gas: they are aware that their economy would struggle to withstand another sharp spike in inflation – which would almost certainly eventuate if it stopped taking Russian gas altogether.
Russian gas has helped keep Europe’s heavy industry going throughout the Ukraine war
This week, European leaders agreed to stop allowing Russia to use its ports to “trans-ship” its LNG – essentially acting as a stop-off point towards other destinations. However, those transshipments account for only a fraction – at most a quarter – of the Russian gas coming in on tankers to Europe. The vast majority ends up in Belgium, France and Spain, heating European homes, fuelling power stations and powering machinery in factories.
While European leaders have imposed wide-ranging sanctions and price caps on shipments of oil, no such controls exist for liquefied natural gas. So the Yakov Gakkel and a fleet of LNG tankers carry on sailing between Siberia and various ports in Europe – Zeebrugge, Dunkirk, Montoir and Bilbao – keeping the continent supplied with the Russian hydrocarbons it still cannot live without.
British firm’s role in lucrative trade
But there is another reason why this ship is particularly unique, for the Yakov Gakkel – this critical cog in the financial machine that helps finance the Russian regime – is actually part-owned and operated by a British company.
That brings us back to a street overlooking the Clyde in Glasgow, where, in a glass-fronted office block, you will find the operational headquarters of a company called Seapeak. The chances are you haven’t heard of Seapeak before, but this business owns and operates a fleet of LNG tankers all across the world.
That fleet includes the Yakov Gakkel and four other LNG icebreakers that ply this Siberian trade. That a British company might be facilitating this lucrative trade for Russia might come as a surprise, but there is nothing illegal about this: the sanctions regime on Russia just turns out to be significantly more porous than you might have thought.
We tried repeatedly to speak to Seapeak – to ask them about the Yakov Gakkel and whether they felt it was appropriate – given the UK has forsworn LNG imports – that a British company and British workers are helping administer this Russian trade. We sent emails with questions. However, they did not respond to our calls or our emails.
When, after weeks of efforts to get a response, I visited their offices in Glasgow, I was met by a security guard who told me Seapeak would not see me without an appointment (which they were refusing to give me). Eventually I was told that if I would not leave they would call the police.
A security guard at Seapeak’s offices in Glasgow said no one was available to speak to Sky News
Seapeak is not the only British company helping keep Russian gas flowing. While British insurers are banned from protecting oil tankers carrying Russian crude, there’s no equivalent sanction on Russian LNG ships, with the upshot that many of these tankers are insured by British companies operating out of the Square Mile.
We spent some time tracking another icebreaking tanker, the Vladimir Rusanov, as it approached Zeebrugge. It is insured by the UK P&I Club, which also insures a number of other LNG carriers.
In a statement, it said: “The UK Club takes great care to observe all applicable sanctions regulations in relation to Russian energy cargoes, but the direct carriage of LNG from Yamal to Zeebrugge, and provision of insurance services for such carriage, is not presently sanctioned. If the EU and G7 nations were to change their policy… the Club would of course comply by adjusting or withdrawing its services, as necessary.”
The Vladimir Rusanov off the coast of Zeebrugge
The transport of Russian gas into Europe – its dependence on British operators and insurers – is only one small example of the loopholes and omissions in the UK sanctions regime. But while government ministers have expressed concern about the effectiveness of the broader sanctions regime, there is still scant evidence they intend to tighten up this corner of it.
Before the election was called the Treasury Select Committee was in the middle of collecting evidence for its own inquiry into the regime, which was expected to focus on insurers of vessels taking Russian goods. However, the inquiry was wound up prematurely when the election was called in May.
Read more on Sky News:
EU sanctions target Russian gas for first time
Russian oil still seeping into the UK
In the meantime, ships like the Yakov Gakkel carry on taking billions of cubic metres of gas from the gas fields of Yamal in Siberia down to Europe, in exchange for billions of euros. And those and other hydrocarbon revenues are one of the main explanations for how Russia is able to produce more missiles and weapons than the Ukrainians.
So Europe carries on fuelling its industry and its power and heating grids with molecules of gas coming from Siberian gasfields, while assuring itself it’s doing everything it can to fight Vladimir Putin.
It is, in short, a discomforting situation. But given the alternative is to induce another cost of living crisis, there is little appetite in Europe to change things.
An Israeli delegation is heading to Qatar for indirect talks with Hamas on a possible hostage and ceasefire deal in Gaza.
The development comes ahead of a meeting between Israeli Prime Minister Benjamin Netanyahu and US President Donald Trump in Washington DC on Monday aimed at pushing forward peace efforts.
The US leader has been increasing pressure on the Israeli government and Hamas to secure a permanent ceasefire and an end to the 21-month-long war in Gaza.
Smoke rises in Gaza following an explosion. Pic: Reuters
Mr Trump said on Tuesday on social media that Israel had agreed “to the necessary conditions to finalise” a deal on a truce.
And Hamas, which runs the coastal Palestinian territory, said on Friday it has responded to the US-backed proposal in a “positive spirit”.
So what is in the plan?
The plan is for an initial 60-day ceasefire that would include a partial release of hostages held by the militant group in exchange for more humanitarian supplies being allowed into Gaza.
The proposed truce calls for talks on ending the war altogether.
The war in Gaza began after Hamas attacked Israel on 7 October 2023, killing 1,200 people and taking 250 others hostage. Dozens of hostages have since been released or rescued by Israeli forces, while 50 remain in captivity, including about 30 who Israel believes are dead.
The proposal would reportedly see about half of the living hostages and about half of the dead hostages returned to Israel over 60 days, in five separate releases.
Eight living hostages would be freed on the first day and two released on the 50th day, according to an Arab diplomat from one of the mediating countries, it is reported.
Five dead hostages would be returned on the seventh day, five more on the 30th day and eight more on the 60th day.
That would leave 22 hostages still held in Gaza, 10 of them believed to be alive. It is not clear whether Israel or Hamas would determine who is to be released.
Hamas has sought guarantees that the initial truce would lead to a total end to the war and the withdrawal of Israeli troops from Gaza.
A Hamas official has said Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.
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Contractors allege colleagues ‘fired on Palestinians’
Possible challenges ahead
And in a sign of the potential challenges still facing the two sides, a Palestinian official from a militant group allied with Hamas said concerns remained.
The concerns were over humanitarian aid, passage through the Rafah crossing in southern Israel to Egypt and clarity over a timetable for Israeli troop withdrawals.
Hamas’s “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defense Forces (IDF) inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.
But the source told Sky News: “Things are looking good.”
The Times of Israel reported Hamas has proposed three amendments to the proposed framework.
According to a source, Hamas wants the agreement to say that talks on a permanent ceasefire will continue until an agreement is reached; that aid will fully resume through mechanisms backed by the United Nations and other international aid organisations; and that the IDF withdraws to positions it maintained before the collapse of the previous ceasefire in March.
Mr Netanyahu’s office said in a statement that changes sought by Hamas to the ceasefire proposal were “not acceptable to Israel”.
However, his office said the delegation would still fly to Qatar to “continue efforts to secure the return of our hostages based on the Qatari proposal that Israel agreed to”.
Read more:
‘Two security workers injured after grenades thrown at aid site’
The man in the room acting as backchannel for Hamas in negotiations with US
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Another potential challenge is that Mr Netanyahu has repeatedly said Hamas must be disarmed, which is a demand the militant group has so far refused to discuss.
Hamas has said it is willing to free all the hostages in exchange for a full withdrawal of Israeli troops and an end to the war in Gaza.
Israel rejects that offer, saying it will agree to end the war if Hamas surrenders, disarms and goes into exile – something that the group refuses.
Previous negotiations have stalled over Hamas demands of guarantees that further negotiations would lead to the war’s end, while Mr Netanyahu has insisted Israel would resume fighting to ensure the group’s destruction.
They rose to their feet in ecstatic surprise, shouting “heydar, heydar” – a Shia victory chant.
This was the first public appearance of their supreme leader since Israel began attacking their country.
He emerged during evening prayers in his private compound. He said nothing but looked stern and resolute as he waved to the crowd.
He has spent the last weeks sequestered in a bunker, it is assumed, for his safety following numerous death threats from Israel and the US.
His re-emergence suggests a return to normality and a sense of defiance that we have witnessed here on the streets of Tehran too.
Earlier, we had filmed as men in black marched through the streets of the capital to the sound of mournful chants and the slow beat of drums, whipping their backs with metal flails.
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Defiance on streets of Tehran
This weekend they mark the Shia festival of Ashura as they have for 14 centuries. But this year has poignant significance for Iranians far more than most.
The devout remember the betrayal and death of Imam Hussein as if it happened yesterday. We filmed men and women weeping as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The armies of the Caliph Yazid killed the grandson of the Prophet Muhammad in the seventh-century Battle of Karbala.
Shiite Muslims mark the anniversary every year and reflect on the virtue it celebrates, of resistance against oppression and injustice.
But more so than ever in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here among people and officials.
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
Death to Israel chants resounded outside the mosque in skies which were filled for 12 days with the sounds of Israeli jets. There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression even if it is the most powerful force in the world.”
A woman was dismissive about the US president. “I don’t think about Trump, nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby draw a line between Imam Hussein’s story and current events. The seventh-century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
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Officially Iran is projecting defiance but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence and as state officials have announced, this time Israel will receive an even stronger response compared to previous times,” she said.
“We hope that Israel will not make such a mistake.”
But there is also a hint of conciliation: Senior Iranian officials have told Sky News that back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. That proved unfounded, the government is in control here.
For many Iranians, it seems quite the opposite happened – the 12-day war has brought them closer together.
To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.
It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.
But this year in particular has poignant significance for Iranians.
The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.
Iranians gather ahead of Ashura
We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.
Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.
Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.
There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”
‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News
A woman was dismissive about the US president.
“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
Officially Iran is projecting defiance, but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”
Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again
But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.
For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.
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