The European Union is considering enhancing control over the shadow fleet of the Russian Federation, which is used for transporting oil and petroleum products in circumvention of sanctions. To this end, member states are working on a common interpretation of the UN Convention on the Law of the Sea, which will allow national authorities to gain more powers to inspect vessels that may pose a threat to underwater pipelines and cables.
This is reported by Business • Media
Combating the Shadow Fleet and New Sanctions from Ukraine
Shadow fleet vessels often use falsified data and change flags, complicating the determination of their national affiliation and exacerbating the control issue. Ukraine, in turn, has recently imposed sanctions on nearly 700 additional vessels believed to be involved in the transportation of Russian energy resources.
Ukraine supports the concept of a complete ban on providing maritime services to vessels involved in the export of Russian energy resources and will work on synchronizing sanctions with its partners.
The Ukrainian authorities also emphasize the need to align sanction policies with international partners to enhance the effectiveness of restrictions against Russia.
Impact on Russia’s Revenues and the Role of Foreign Tankers
Despite the efforts of the EU and its allies to limit trade in Russian oil, some Greek tankers continue to operate with Russian ports. For instance, in December, the vessel Velos Topas was in the port of Ust-Luga, while the tanker Irini was off the coast of St. Petersburg. At the same time, these vessels do not formally violate EU sanctions: under the flag of EU countries, transporting Russian oil is permitted as long as the cargo does not head to the EU and its price does not exceed the established cap.
Meanwhile, Russia’s revenues from oil and gas exports in December may decrease by nearly 50% compared to last year, down to 410 billion rubles (approximately $5.17 billion), marking the lowest level since August 2020. The reasons for this decline are attributed to falling oil prices and the strengthening of the ruble. For the year, it is expected that Russia’s total revenue from oil and gas will decrease by nearly 25% – to 8.44 trillion rubles, which is below the forecasted level of the Russian Ministry of Finance.