The European Union has released its 21st sanctions package and, as expected, dropped the proposal for a full maritime services ban. The decision allows European shipowners and marine service providers to continue transporting Russian oil, provided the cargo is sold below the Oil Price Cap.

Most elements of the package had already been widely reported, but disagreement over a complete ban on maritime services for both Russian oil and LNG, led by Greece, delayed final approval. About 25% of Russia’s crude, refined products and fuel oil is shipped by European shipowners under the price cap, underscoring why the maritime services rules remain a key enforcement lever in the EU’s broader effort to constrain Russian energy revenue without fully severing existing shipping arrangements.

Maritime sanctions are increasingly aimed at reducing the Kremlin’s LNG revenue. The package also clarifies the LNG terminal services ban that takes effect on January 1. That measure has raised compliance concerns for companies that signed contracts and made investments before Russia’s invasion of Ukraine in February 2022, since the legal text now has to map sanctions restrictions onto pre-existing commercial commitments and infrastructure use.

Measures included in the package

• An additional 41 vessels were designated, bringing the total to 632. The EU said the ships were targeted for supporting Russia’s energy sector, transporting military equipment, or carrying stolen Ukrainian grain. Several smaller bunkering tankers used to service shadow fleet vessels were also listed.
• Eight ship managers in India, Singapore, Oman, China and the UAE were sanctioned.
• Dubai-based Aquamarine Ship Management, described as the first crewing agency sanctioned under the package, was listed.
• Three oil refineries in Russia and one in Belarus were sanctioned.
• Import restrictions were introduced for copper ores, nickel ores, lead ores and precious-metal ores.
• Restrictions were also placed on sales of EU-owned LNG tankers. Shipowners must notify regulators before sales to third countries, while a full ban remains under assessment.
• The Oil Price Cap for crude oil was frozen at $44.10 per barrel until July 2027, with reviews noted.
• Oil traders and intermediaries, including Redwood Global Supply, a UAE oil trader accused of helping evade sanctions on Russian oil producers including Rosneft and Lukoil, were added.
• Japan’s exemption for receiving crude from Russia’s Sakhalin 2 project was extended.
• A temporary exemption from the full LNG services ban starting January 1 was granted for EU-owned LNG carriers that signed contracts before February 2022.
• The LNG terminal services ban introduced in the 20th package and taking effect on January 1 was clarified to cover Russia, EU and non-Russian third-country operators controlled by Russian companies.
• Georgia’s Kulevi refinery has been given six months to stop using Russian oil.

Twelve of the 41 sanctioned ships were already under restrictions. Of the new listings, 34 were tankers, including smaller coastal tankers, six were bulk carriers, and one was a service vessel.

Previous sanctions packages have increasingly targeted the enablers and facilitators of maritime sanctions circumvention. Among those listed is Suniel Kumar, an Indian national described as the architect of a network of fraudulent ship registries used by sanctioned shadow fleet tankers to evade sanctions.

Kumar is linked to the Guyana registry, which the report describes as the largest fraudulent ship registry used by shadow fleet tankers, as well as at least a dozen others.

The legal text also includes a provision allowing authorities to “dispose safely of Russia oil cargoes they seize and confiscate.” At least three shadow fleet ships are currently seized by authorities in France, Germany and Belgium.

Source: Windward