By Ewa Krukowska and Alberto Nardelli (Bloomberg) —
The European Union proposed banning access to its ports for ships trying to circumvent sanctions on Russian oil as it seeks to transport its crude oil and products below the price caps set by the Group of Seven nations impede.
The measure is part of a broader package of sanctions against Russia following the country’s invasion of Ukraine, according to EU documents seen by Bloomberg. With price caps already in place for Russian crude oil and petroleum products, the focus is now on closing loopholes and enforcing the caps more effectively.
The EU executive cited a “sharp increase in fraudulent practices and associated environmental risks” by ships attempting to circumvent the G-7 price cap and a ban on Russian oil imports into the Union. Ships suspected or found to be violating sanctions through ship-to-ship transfers should be banned from European ports and locks, it said.
Ship-to-ship transfers have become a crucial factor in getting Moscow’s oil to market following the European Union’s ban on Russian crude oil at sea in early December. Since December, the Russian oil change has focused on Ceuta, a Spanish enclave in North Africa, and off the Greek coast near Kalamata.
In early February, Spanish authorities sent a letter to local shipping companies reminding them that facilitating the activity put them at risk of violating sanctions. EU companies are banned from offering a range of crude oil transport services unless the onboard cargo is purchased at or below the G-7 price cap of $60 a barrel.
Russia uses a huge fleet of older ships to circumvent EU and G-7 restrictions. With many of these ships aiming for 20 years of service, previous owners would have expected to sell them for scrap. Instead, they gave them to newly formed companies, which continue to use them.
As part of the proposed sanctions package, which is the bloc’s 11th since February 2022, the EU also proposed targeting ships that switch off navigation systems. The measures would need the support of all EU Member States to be adopted.
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