UK bans Russian oil tankers from ports as new sanctions target shipping

Russian-owned oil tankers have been banned from docking in the UK as part of a widespread moratorium on the country's shipping in response to the invasion of Ukraine, a government spokesperson said March 1.

In 2020, Russia was the third-largest source of crude oil imports to the UK, amounting to 3.9 million mt, or around 11% of imported crude, according to government data. Russia was the second-largest source of imported petroleum products, amounting to 4.0 million mt, or 16% of the total, the data showed.

"UK Government ministers have today signed legislation banning all ships that are Russian-owned, operated, controlled, chartered, registered or flagged from entering British ports," the government spokesperson said, adding the ban does not cover cargoes of Russian goods, or commodities carried by non-Russian-controlled ships.

British ports handled over 12.6 million mt of cargo to, or from Russia in 2020, most of which were hydrocarbons. Over half of all imports were liquid bulk, such as crude oil and refined products, the British Ports Authority said.

The sanctions measure adds to nervousness amongst counterparts handling business and trade with Russia amid a widening international sanctions response to its actions in Ukraine. "The growing risk of sanctions has reduced the appetite of many in the industry to commit to Russian oil," analysts at ING Bank said in a note.

The UK government spokesperson added that the Department for Transport would provide guidance to ports and harbors "very soon." However, they did not provide details on when the ban on Russian ships docking will begin.

A spokesperson for UK-based energy major BP was unable to immediately comment on the impact of any scheduled arrivals of Russian oil tankers to the UK but said it would continue to comply with all relevant sanctions and rulings affecting business with Russia.

Shell declined to comment on any impact of the ban on its UK operations.

Hard to implement

A handful of tankers owned by Russian shipping company Sovcomflot have been in UK territorial waters recently. The NS Century owned by Sovcomflot discharged 700,000 barrels of Nigerian crude at the Finnart Oil Terminal in Scotland on Feb. 27, according to tanker tracking tool cFlow.

The tanker is now leaving Scotland. Meanwhile, the NS Champion, which was supposed to load UK crude Flotta Gold from the Flotta Terminal in Orkney Islands on Mar. 1, had to divert its course away from the UK due to the current shipping ban.

Transport minister Grant Shapps said in a letter posted on Twitter Feb. 28 that the Department for Transport does not consider it appropriate for Russian vessels to continue to enter UK ports.

A government spokesperson told S&P Global Commodity Insights at the time that this was for guidance only.

However, there were concerns amongst market participants that a ban could be difficult to implement.

"The 'open port duty' and contractual arrangements could make this difficult in some circumstances, but we understand the UK Government is working on legislation to underpin this, which will be published in the coming days," a spokesperson for the British Ports Authority told Platts Feb. 28.