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.

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.

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.

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.

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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.

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.

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 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.

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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.

Sanctions imposed against Russia over its invasion of Ukraine have failed to achieve any of their aims, the country’s ambassador has told Sky News.

Andrei Kelin was speaking to Sky News as an investigation by Sky’s Ed Conway revealed glaring loopholes in the restrictions regime, which has allowed British companies – legally – to help keep Russian gas flowing and generate huge revenues for the Kremlin’s war machine.

He defended the continued trade with Europe despite the heightened tensions, arguing “business is pure business”.

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He also argued the supply of weapons by the West, including Britain, to Ukraine was “bad”, as it perpetuated the conflict, which he claimed would be worse for Kyiv in the long-term.

Speaking to The World With Yalda Hakim programme, Mr Kelin said: “The goal of the sanctions was first of all to spoil (the) normal life of Russians so they will say that (Vladimir) Putin is wrong.

“The second point of sanctions was to damage the Russian economy as much as possible.

“The third point was to change the political personnel.

“So none of these goals have been reached by the sanctions.”

Despite the backdrop of fraught relations, Europe still depends on Russia for around 15% of its gas, handing over around €10bn (£8.5bn) since 2022.

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However, Mr Kelin played down the importance to Russia of the trade.

He said: “It’s just a small portion of the budget, which is measured now in trillions of whatever it is – euros, dollars, pounds, roubles – the budget is big.”

He added: “We’re not so greedy as Europe. There is no ideology in it.

“Why not if they are buying it?

“Business is pure business. There’s no politics. We did not sanction Europe for purchasing anything from us.”

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Mr Kelin went on: “The West is delivering weapons to Ukraine and this is bad because it is a war of attrition, but the attrition of Ukraine (is) the continuation of the conflict in Ukraine.

“The longer it goes (on), the worse the situation is for Ukraine.

“Not for us. Economically we stand absolutely independent, morale is high, people believe in the president, it has been shown during the elections.”

Drivers are being warned fuel prices are on the rise again amid rising oil costs and suggestions motorists are still getting a raw deal.

The AA declared on Tuesday that a 10-week run of falling pump prices had come to an end.

The motoring group said while average costs were still locked at levels seen last week, a growing number of forecourts were imposing hikes to pump costs due to higher oil and wholesale charges.

Its rival, the RAC, said in a separate study that prices for both petrol and diesel remained “too expensive”, accusing retailers in England, Scotland and Wales of giving their customers a “raw deal” based on wholesale trends.

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Petrol should be an average 4.5p a litre lower across the three nations, its report stated, while diesel should be 8p less.

Independent retailers have long denied the RAC’s claims of profiteering, claiming its criticism takes no account of the industry’s increased costs for things such as wages and electricity.

There is currently a voluntary fuel price transparency scheme in place operated by the Competition and Markets Authority (CMA) after it found drivers were overcharged by supermarkets in 2022 to the tune of £900m.

A statutory Pumpwatch scheme is expected to replace it later this year, forcing forecourts to divulge their costs.

The initiative, which is modelled on an existing price comparison service used in Northern Ireland and credited with bolstering competition, could also result in the regulator being given powers to fine rip-off fuel providers.

The final make-up will be determined by whoever forms the next government after Thursday’s general election.

The CMA’s transparency scheme showed average petrol costs at 144.5p and diesel at 149.6p on Monday.

AA fuel price spokesman Luke Bosdet said: “The question is whether, after a significant fall in the UK’s average petrol price in June, the price will repeat last year’s sharp rise going further into the summer.

“It would be a blow for the impending summer getaway if the cost of road travel took off again.

“For now, filling up sooner rather later will take advantage of current lower prices. Statutory fuel price transparency coming into force later this year will therefore be a big boost for drivers facing this type of market movement in the future.

“At present, the scheme has revealed some upheaval in old patterns of fuel retailing, such as Asda offering supermarket pump prices at some non-supermarket forecourts where it has a retail presence and the independent chain Motor Fuel Group providing cheap fuel on former Morrison supermarket forecourts.”

Supermarkets had historically been the market leaders in fuel price costs, often offering discounts on top to lure shoppers to their stores.

This ended during the cost of living crisis as chains invested instead in dropping prices for household essentials.

The RAC report claimed that UK wholesale fuel costs did not justify the average prices still being charged outside Northern Ireland.

It said that there were vast differences between average costs at supermarket pumps and that Shell and BP-branded sites tended to charge the most.

RAC head of policy Simon Williams said: “We will continue to highlight this disparity, along with the massive differences between major retailers’ high and low prices, to the new government and the Competition and Markets Authority with a view to them being addressed by the new Pumpwatch scheme when it is up and running.”

LSEG data on Tuesday showed Brent crude oil, the international benchmark, trading above $87 a barrel – levels last seen at the end of April.

Global oil costs have been rising steadily since early June.

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Some of the increases can be attributed to rolling production cuts by major oil-producing nations in the OPEC+ cartel, which includes Saudi Arabia and Russia.

The conflict in the Middle East, disruption to shipping in the Red Sea and forecasts of rising demand in China have also weighed.

Expectations of a 5% lift in drivers using America’s roads during the peak summer holiday season were helping drive the price higher on Tuesday, according to market analysts.

Hani Abuagla, senior market analyst at XTB MENA, added: “Furthermore, Hurricane Beryl impacted sentiment, posing a threat to oil production if it shifts toward the Gulf of Mexico.

“These uncertainties led to further market volatility.”