EU, G7 Weigh Ban on Maritime Services for Russian Oil Exports
The Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine. Six sources familiar with the matter confirmed this development.
Russia still exports over a third of its oil in Western tankers, mostly to India and China, using Western shipping services. The ban would end this trade, which is mostly done through the fleets of EU maritime countries including Greece, Cyprus, and Malta. This move would mark the closest the G7 and EU have ever come to a total ban on dealing with Russian crude and fuel not only at the level of imports but also transportation and maritime services.
Shadow Fleet Expands as Price Cap Fails
The other two-thirds of exported Russian oil goes out in a fleet of hundreds of tankers operating outside Western scrutiny and maritime standards, known as the dark or shadow fleet. Russia would need to expand this fleet if the G7 and EU impose the maritime services ban. The administration of former U.S. President Joe Biden argued that if Russia spent more money on tankers, it would have less money for waging war in Ukraine.
Ban Could Be Part of Next Sanctions Packet
The ban could be part of the EU’s next package of sanctions against Russia, slated for early 2026, three out of the six sources told Reuters. The 27-nation EU would like to approve the ban together with a broader G7 agreement before proposing it in the package, two of the six sources said.
British and American officials are pushing forward the idea in technical G7 meetings, the sources said. Any final U.S. decision would depend on the pressure tactics President Donald Trump’s administration chooses amid ongoing peace talks it is brokering between Ukraine and Russia, four sources said.
Price Cap Fails to Curb Russian Oil Revenue
The G7 imposed a price cap for Russian oil in 2022 after Russia invaded Ukraine to curb the Kremlin’s income while allowing third countries to buy Russian oil using Western services – but only if buyers paid Russia less than the price cap. To avoid the cap, Russia re-routed much of its oil to Asia on its own ships, many of which have since been sanctioned by the West.
These vessels are old, their ownership is opaque, and they sail without Western insurance cover. The overall fleet working with sanctioned oil from Russia, Iran, and Venezuela encompasses 1,423 tankers, of which 921 are subject to U.S., UK, or EU sanctions, according to maritime data specialist Lloyd’s List Intelligence.
Reporting by Julia Payne, Jonathan Saul, and Maria Cheng; additional reporting by Elizabeth Piper and William James in London; Andrea Shalal, David Lawder, and Timothy Gardner in Washington; Renee Maltezou in Athens.
Original Article: Exclusive: EU, G7 weigh ban on maritime services for Russian oil exports, end to price cap — Reuters