EU sanctions 41 more Russian shadow fleet tankers in latest crackdown

The European Union imposed sanctions on 41 additional vessels from Russia's shadow oil tanker fleet Dec. 18, expanding restrictions designed to curtail Moscow's energy revenues and disrupt crude flows that help finance the Russia-Ukraine war.

The new designations bring the total number of sanctioned vessels to nearly 600, according to a European Council statement. The targeted tankers face port access bans and restrictions on maritime transport services across EU member states, measures aimed at disrupting Russia's ability to circumvent the G7 oil price cap mechanism and transport crude oil to international markets, the Council said.

The sanctions specifically target non-EU tankers identified as part of what the EU calls "Putin's shadow fleet" -- vessels that either circumvent oil price cap restrictions, support Russia's energy sector, or transport military equipment and stolen Ukrainian grain. The designation reflects the EU's strategy to dismantle the maritime infrastructure that enables Russia to maintain oil export revenues despite international restrictions.

"The EU remains ready to step up pressure on Russia and its shadow fleet value chain, including by adopting further sanctions," the Council said in a statement.

The Council's decision coincides with recent measures against nine shadow fleet enablers and the adoption of a declaration by EU member states to use international maritime law frameworks against shadow fleet operations and protect critical undersea infrastructure.

Mounting sanctions pressure

Tightening sanctions on Russia are driving more Western tankers away from the country, resulting in a growing logistics bottleneck due to slow deliveries by non-G7 tankers, according to ship-tracking data and some tanker industry participants.

Tankers flagged, owned or operated by companies based in G7 countries and their allies, or insured by Western protection and indemnity clubs, lifted 24.4% of Russia's crude exports of 3.4 million b/d in November, according to data from S&P Global Commodities at Sea and Maritime Intelligence Risk Suite. The share was at a three-month low.

The discount of Russia's Urals crude to international benchmarks has been widening. Platts, part of S&P Global Energy, assessed Urals on a FOB basis at Primorsk at $30.91/b Dec. 17, a $29.97/b discount to Dated Brent. The discount averaged $26.67/b over Dec. 1-17, widening from $14.17/b through November and $12.34/b through October.