EU Closes in on More Tanker Sanctions to Enforce Russian Oil Price Cap

 

Media reports coming from this week’s meeting of the European Commission highlight that the members are closing in on the first of possibly two new rounds of sanctions focusing on tankers to further tighten the restrictions on Russian oil and gas. It follows a similar action launched earlier this week by the UK and overwhelming support two weeks ago from the European Parliament for a new round of sanctions.

Members speaking to Reuters and Bloomberg provided the first details on what will be the fifteenth round of sanctions. Experts point to the vital revenues that Russia continues to get from its oil and gas trade which is driving the EU’s initiative to further tighten the enforcement of the G7 price cap on Russian oil.

According to the reports, the EU proposal targets as many as 48 crude oil tankers. So far, the EU has lagged behind both the U.S. and UK in listing tankers. UK officials announced earlier this week that they were adding 30 tankers, mostly for crude oil as well as some product tankers, to the country’s sanctions list. They included vessels indirectly controlled by Sovcomflot as well as a range of vessels cited for unknown management or insurance coverage. 

UK officials highlighted that it has listed 73 oil tankers after gaining the authorization this year to list specific vessels. The United States’ tally of sanctioned tankers is reportedly at 39 while the EU has only 19 currently listed.

This move comes as environmentalists continue to highlight the potential for an environmental disaster from the shadow fleet. Speaking to investors yesterday, CEO Lars Barstad of Frontline, one of the largest operators of crude oil tankers, also called for more efforts to reign in the shadow fleet. He said an “increase in sanctioned oil trade and movement of illicit barrels, was impacted the company and the industry. He was critical of the organization and implementation of the sanctions.

EU members speaking to the media indicated that the total package would include 29 additional entities and 54 individuals according to Reuters which says over 2,200 sanctions have been imposed since the Russian invasion of Ukraine.

Also on the table for the EU efforts are further tightening of the restrictions on the import of Russian gas as well as the energy trade using third parties to skirt the restrictions. Members have repeatedly said that they are locked into Russian gas contracts that could only be broken by EU prohibitions. Germany, however, has told its state-support LNG terminals not to accept further imports of Russian gas.

While the current initiative for the fifteenth package is expected to be presented by December, Reuters speculates that a larger effort is also in the works. They highlight that Poland will assume the EU presidency in January 2025 which could set the stage for support for the wider sanctions.