The European Union’s sanctions envoy, David O’Sullivan, has emphasized the need for coordination with other G7 countries before imposing a full maritime services ban on Russia’s seaborne crude oil exports.
The EU Commission proposed a sweeping ban on any services that support Russia’s seaborne crude oil exports on February 6, going far beyond previous piecemeal EU sanctions in its effort to stunt Moscow’s key source of income for its war on Ukraine. The proposal did not specify how the ban would be phased in or whether it would later include refined products – whose price cap is different – and other energy exports such as liquefied natural gas.
G7 Coordination Key to Maritime Services Ban
O’Sullivan told a news conference in Bishkek that the EU is in favor of a maritime services ban, but needs to coordinate with G7 colleagues before a decision is taken. He said talks will be held in the coming days and weeks to discuss the proposal.
The proposed ban would end the practice of using Western tankers – mostly from Greece, Cyprus, and Malta – to transport Russian oil, which mostly supplies India and China. This move would render obsolete a price cap on purchases of Russian crude oil that the G7 has tried to enforce with mixed success.
Price Cap and Revenue Impact
The EU’s sanctions envoy highlighted the impact of the price cap on Russia’s revenue from oil and gas, which is down dramatically in recent months. The current price cap sits at $44 a barrel, compared to $64 currently for Iraq’s similar Basra Medium blend.
Russia exports over a third of its oil in Western tankers, with the help of Western shipping services. The proposed ban would end this practice, which mostly supplies India and China.
G7 Unity on Maritime Services Ban
Among G7 countries, the EU is most concerned about U.S. support for the measure, diplomats have said. The U.S. has shunned a coalition set up by the EU and other G7 members to enforce a price cap on Russian crude oil, although it did add Russia’s top two oil companies, Rosneft and Lukoil, to its list of sanctioned entities subject to full asset freezes.
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Original Article: EU Seeks G7 Coordination on Maritime Services Ban on Russian Seaborne Oil — Gcaptain