UK sanctions 20 shadow fleet tankers, Rosneft's marine fuel unit

The UK has sanctioned 20 oil tankers in the shadow fleet and a bunker unit owned by Russia's state-owned oil company Rosneft in its latest attempt to undermine Moscow's war chest against Ukraine.

In its latest round of sanctions announced during the G7 Summit on June 17, the British government targeted companies across Russia's financial, military and energy sectors, some of which related to maritime.

Rosneft Marine (UK), Rosneft's UK-based marine fuel unit, was blacklisted along with Orion Star and Valego that the UK said was crewing and managing shadow fleet vessels.

The 20 ships sanctioned this time have lifted nearly 25 million barrels of crude, fuel oil and refined products from Russia so far this year, according to S&P Global Commodities at Sea.

"Today's sanctions show we will systematically dismantle his dangerous shadow fleet, starve his war machine, and support Ukraine to defend itself," Foreign Secretary David Lammy said.

Russia, Iran and Venezuela, faced with tightening Western sanctions, have been acquiring aged tankers to form the shadow fleet via state or associated interests to maintain their overseas oil sales in recent years.

A joint study by S&P Global Energy and Market Intelligence found 940 crude and product tankers, or 17% of the global in-service tanker capacity, were either confirmed by Western authorities to have violated sanctions or at high risk of breaching them as of May.

Price cap

Lammy added that the UK plans to move with partners to tighten the oil price cap to "hurt Russia's oil revenues while ensuring stability of the energy market," but didn't provide a specific figure.

Since December 2022, the G7 and its allies have banned tanker operators, marine insurers, and other shipping service providers from participating in seaborne Russian crude exports unless the barrels are sold for $60/b or less.

In May, the UK sanctioned 128 ships in two rounds of sanctions while proposing a review of price cap when Russia's flagship grade, Urals, was trading below the threshold on a free-on-board Primorsk basis.

On June 10, the EU said it would seek to drop the price cap to $45/b. The US has yet to agree to this measure.

International crude prices have risen significantly since Israel began air strikes on Iran June 13. Platts assessed FOB Primorsk Urals prices at $63.72/b June 17, up from $57.735/b June 12.