POLITICO: New EU sanctions put the squeeze on Russian oil smugglers

Hundreds of tankers could be barred from European ports as part of a new effort to crack down on illicit sales of Russian crude oil that Western nations fear are helping fund the war in Ukraine.

After weeks of tense negotiations, EU countries on Wednesday finally signed off on the 11th package of sanctions to be imposed on Moscow in just over a year. But instead of introducing new restrictions, draft documents seen by POLITICO show Brussels' focus is now on tightening loopholes in existing rules, creating powers for secondary sanctions and naming and shaming companies that fall foul of the rules.

"Attempts to circumvent Union restrictive measures have resulted in a sharp increase of deceptive practices by vessels transporting Russian crude oil and petroleum products," the text of the Council decision reads.

Officials are concerned about the so-called shadow fleet of hundreds of ageing tankers carrying Russian oil, potentially bought at prices above the $60 per barrel price cap imposed by the G7.

Many of the vessels, which are typically owned by an opaque network of shell companies - many reportedly linked to Greece - are understood to turn off their navigation systems to hide the fact they have docked at Russian ports, or take on fuel from other tankers at sea to obscure its origins.

Measures proposed by the European Commission and agreed by member countries will prohibit vessels suspected of these shady practices from entering EU ports "irrespective of their flag of registration." Tankers will also have to notify authorities if they are planning a ship-to-ship oil transfer "at least 48 hours in advance" within specific geographical areas.

According to Byron McKinney, a director with S&P Global Market Intelligence, "The package has something of a potential challenge and some added stress for companies on the compliance side, but my feeling is it’s ultimately been rather watered down."

A "conservative" analysis from S&P estimates that a total of 167 tankers have been involved with a ship-to-ship transfers with a Russian vessel and later docked at an EU port.

Source: POLITICO