EU clamps down on Russia’s shadow oil tanker fleet in 16th sanctions package

EU member states have agreed to fresh clampdown measures against Russia's shadow oil tanker fleet as part of the bloc's latest sanctions against the country, officials said Feb. 19.

"I welcome the agreement on our 16th package of sanctions," European Commission President Ursula von der Leyen wrote on X. "The EU is clamping down even harder on circumvention by targeting more vessels in Putin's shadow fleet and imposing new import and export bans."

Ambassadors from member states unanimously approved another round of trade restrictions to undermine Russia's war chest against Ukraine, with the sanctions package due to be formally adopted on the third anniversary of Russia's invasion of Ukraine, Feb. 24, according to EU institutions.

Citing unnamed EU diplomats, several news organizations reported the bloc will sanction another 73 tankers in the shadow fleet, 13 Russian banks, and ban imports of Russian aluminum.

The maritime sanctions will bring the total number of ships on the EU blacklist against Russian trade to over 150. The EU blacklisted 52 ships in its previous sanctions package.

Russia has amassed a sizeable tanker fleet in recent years to maintain overseas oil sales in circumvention of G7's price cap regime, which prohibits maritime services companies from facilitating Russian oil trades unless the barrels are sold below certain thresholds.

Based on a recent analysis(opens in a new tab) of S&P Global Commodities at Sea(opens in a new tab) and Maritime Intelligence Risk Suite data, 586 tankers with 57.2 million dwt might have been used to transport sanctioned Russian oil as of November.

Sanctions development

While the price cap has not restrained Russia's capability to export oil, its supporters have suggested Russian oil is sold at larger discounts than it would have been otherwise.

The discount of Russia's flagship crude Urals to Date Brent widened by nearly $4/b to $15/b Feb. 18, according to Platts, part of S&P Global Commodity Insights, after the previous US administration sanctioned more than 150 oil tankers on Jan. 10.

According to data from Platts, ESPO on a FOB Kozmino basis dropped nearly $10/b to an $11.50/b discount to Dubai on Jan. 20 before recovering to a $5.75/b discount on Feb. 19.

But future US sanctions against Russia have been called into question after Donald Trump, sworn in as president on Jan. 20, started a rapid push to end the Ukraine war. Secretary of State Marco Rubio even reportedly suggested easing EU sanctions could be part of a peace deal with Russia.

US sanctions have been much more effective than EU due to the dollar's dominant status as currency, and Brussels could struggle to enforce sanctions effectively on its own, according to shipping professionals.