The EU’s 21st sanctions package has been released and, as anticipated, the proposal for a full maritime services ban was shelved, allowing European shipowners and marine service providers to continue shipping Russia oil, so long as it is sold at prices below the Oil Price Cap.

Most of the package had already been trailed, but disagreements over a complete maritime services ban on shipping both Russian oil and LNG led by Greece delayed sign-off. About 25% of Russia crude, refined products and fuel oil is shipped by European shipowners under the price cap.

Sanctions in the maritime space are increasingly focusing on the Kremlin’s revenue stream from LNG sales. The package provided greater clarity over the LNG terminal services ban that begins on January 1. The ban has complicated compliance for companies that agreed contracts and investments before Russia invaded Ukraine in February 2022.

Sanctioned in the package
• An additional 41 vessels adding to the 632 already designated. The EU said it targeted ships that supported Russia’s energy sector, transported military equipment or stolen Ukrainian grain. A number of smaller bunkering tankers used to supply Shadow fleet ships were included in the list.
• Eight shipmanagers in India, Singapore, Oman, China and UAE.
• The first crewing agency, Dubai-based Aquamarine Ship Management.
• Three oil refineries in Russia and one in Belarus.
• Import restrictions now in place for copper ores, nickel ores, lead ores and precious-metal ores.
• Restrictions also placed on the sales of EU-owned LNG tankers. Shipowners have to notify regulators before sales to third countries with a full ban currently under assessment.
• The Oil Price Cap for crude oil was frozen at its current level $44.10/bbl until July 2027 with reviews noted.
• Oil traders and intermediaries including Redwood Global Supply, a UAE oil trader used to evade sanctions on Russian oil producers including Rosneft and Lukoil.
• Japan’s exemption on receiving crude from Russia’s Sakalin 2 project extended.
• Temporary exemption from the full LNG services ban beginning on January 1 allowed for EU-owned LNG carriers that signed contacts before February 2022.
• LNG terminal services ban introduced in the 20th package that begins on January 1 also clarified to cover Russia, EU and non-Russian third country operators controlled by Russian companies.
• Georgia’s Kulevi refinery has six months to stop using Russian oil.

Twelve of the 41 ships were already sanctioned. 34 ships were tankers, and included smaller, coastal tankers. Six were bulk carriers and one service vessel.

Prior packages have focused on tackling enablers and facilitators of sanctions circumvention in the maritime space. Suniel Kumar, an Indian national credited as the architect behind a network of fraudulent ship registries used by sanctioned shadow fleet tankers to circumvent sanctions was sanctioned.

Kumar is behind the Guyana registry, the largest fraudulent ship registry used by shadow fleet tankers, and at least a dozen others.

Buried in the legal text was a decision that allowed authorities to “dispose safely of Russia oil cargoes they seize and confiscate”.

There are least three shadow fleet ships in France, Germany and Belgium currently seized by authorities.

Source: Windward