EU-owned tankers shipped 35% of Russian oil in January, ahead of a planned “full maritime services ban” that will end Western marine service providers’ ability to transport crude sold to fund the Kremlin’s war in Ukraine.

The ban was announced on February 6 by European Commission President Ursula von der Leyen as part of the EU’s 20th package of sanctions on Russia.

“On energy, we introduce a full maritime services ban for Russian crude oil. It will further slash Russia’s energy revenues and make it more difficult to find buyers for its oil. As shipping is a global business, we propose to enact this full ban in coordination with like-minded partners following a G7 decision,” von der Leyen said.

The announcement also sanctioned 43 shadow-fleet tankers, bringing the total number of ships blacklisted by the EU over the past two years to 640.

The End of the Oil Price Cap

The ban effectively signals the end of the oil price cap set by the Oil Price Cap Coalition, introduced in December 2022. The cap allowed G7 involvement in maritime transport and related services for Russian crude and petroleum products sold below fixed price thresholds.

The mechanism was designed to limit Kremlin revenues while keeping oil flowing during a period of inflation-driven global energy price shocks. Three years on, with oil markets better able to absorb geopolitical disruptions and amid sustained criticism of the cap’s effectiveness, its redundancy has long been anticipated.

In January, tankers sanctioned by the EU, UK, and US shipped 48% of Russian crude, refined products, and fuel oil, according to Windward analysis incorporating data from Vortexa. (Data excludes Kazakh grades.)

By contrast, tankers with beneficial owners in the EU — nearly all based in Greece — shipped 35%. Vessels with untraceable beneficial ownership, typically shadow-fleet ships not yet sanctioned, or owned in non-Western countries, accounted for 17%.

Market Shifts and What Remains Unclear

After the UK and U.S. sanctioned Rosneft and Lukoil in October, the price of Urals export crude fell below the revised EU and UK price cap of $47.60 per barrel. That allowed compliant trades to resume in larger volumes in December and January.

In the first three weeks of November, EU-owned tonnage stepped back as newly established UAE-based shipping companies assumed international marketing of Rosneft and Lukoil crude. These workarounds eased—but did not eliminate—market disruption by December. Dislocation was further amplified by US pressure on India to halt purchases and by the EU’s January 17 import ban on refined products derived from Russian crude.

The refined-products ban affected India, Russia’s second-largest buyer after China, as well as Türkiye. Both countries reduced Russian crude purchases last month, while the US said last week that India would halt imports altogether.

Russia’s oil-on-water volumes tracked by Vortexa stood at around 170 million barrels, the highest level in records dating back to 2016. Volumes have risen steadily from 147 million barrels on October 1.

EU-owned tankers with Western marine insurance have remained a stable, price-cap-compliant presence in Russian trades over the past three years, effectively supplementing the shadow fleet that has served as the Kremlin’s primary logistics lifeline.

Their role has been more pronounced in refined-products shipments, where diesel prices have stayed below the $100-per-barrel cap for more than two years. Just under half of Russia’s refined products were shipped on EU-owned tonnage, while 16% moved on sanctioned vessels.

Crude shipments, where prices for some grades exceed the cap, relied more heavily on sanctioned tankers, which accounted for 63% of volumes in January. EU-owned vessels made up 17%.

Significant uncertainty remains around the scope of the maritime services ban, including whether it will extend to refined products. It is also unclear whether key EU shipowning states — Greece, Cyprus, and Malta — have fully signed off. These countries have historically opposed EU measures that could disrupt shipping businesses operating under their flags or through ship-management companies incorporated locally.
Source: Windward