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Since the 2022 Russian invasion of Ukraine, the European Union, the G7 nations and Australia have imposed sanctions on Russia. The sanctions on oil began in December 2022 and included an embargo of Russian oil, namely, the bringing of crude oil and refined oil products from Russia to the EU and other G7 nations by ship, with a few exceptions.

Sanctions apply to anyone facilitating the maritime transport of such oil in breach of the embargo, including trading and commodities brokering, financing, shipping, insurance, including reinsurance and protection and indemnity, and flagging and customs brokering.

On 23 June 2023 as part of the 11th sanctions package, the EU prohibited access to European ports of all vessels suspected “with reasonable cause”, of having been involved in transshipment of Russian oil at a price higher than the price cap, or having turned off their Automatic Identification System trackers.

Certain ships carrying oil have been flagged as being probably in violation of the embargo and some have been specifically sanctioned, as have their owners/managers.

The number of ships considered in violation of the embargo can be significant. In October 2023, 2 carrying crude oil and 21 with oil products were identified, out of a total of 182 tankers carrying oil from Russian Black Sea ports that month.

In 2023, under 5% of Russian crude oil products went to Europe, a fall of 90% in the year.

History

During and after Russian intervention in the Syrian civil war in 2015, sanctions have been used against Russian tankers by the United States, including product tankers Sudak (IMO:8943155) and Sig (IMO: 9735335), chemical tanker Stalingrad (IMO: 9690212) and the combined chemical and oil tankers Marshal Zhukov (IMO: 9690224) and Yaz (IMO: 9735323). In 2022, following the Russian invasion of Ukraine, 72 ships were directly sanctioned by the US Treasury's Office of Foreign Assets Control (OFAC). Sanctions do not aim to stop these vessels from trading and they have been seen to berth in overseas ports, however they have been restricted by the sanctions, with most ports of call being in Turkey, India, Iran and Egypt.

Breaches of sanctions

Whilst the price of crude remained below the $60 level, breaches were generally limited to small quantities of oil imported into the EU from Russia and transshipment of oil at sea, however when the oil price rose in Summer 2023, the number of potential breaches increased with oil being purchased at a price over the oil cap price.

Ship-to-ship transshipments

The object of ship-to-ship transshipments is to mask the source of the oil, to hide from the buyer (or the authorities) that the oil is Russian and subject to sanctions. Ships involved in transshipments have been known to change their names and their paint colours during voyages and to turn off their Automatic Identification System trackers.

Transshipments have taken place off the Russian enclave of Kaliningrad, in the Black Sea and in the Mediterranean Sea. The majority of transshipments from ships leaving the Black Sea have taken place in the Gulf of Laconia, close to Greece, but outside of the 6-mile territorial limit, it is in international waters. The Jumbo is a crude oil tanker, Gabon flagged, that was based in the gulf acting as a depot tanker, with some ships delivering oil to the depot and others collecting from it.

Shipping refined oil from Bulgaria

Bulgaria has the Lukoil Neftohim Burgas refinery where Russian crude has been allowed under EU rules to be brought by ship. The refined oil is under an export ban by the EU, however refined oil has been shipped to the EU and the US in 2023. Seaexpress a product tanker managed by Thenamaris Ship Management collected 40,000 tons on 10 August 2023 and delivered it on 23 August to Rotterdam. Ship-to-ship transfers were used to send Naphtha from Burgas to the US in June 2023. Bulgaria is cancelling the export quotas given to the refinery from 1 January 2024. The European Commission is investigating the situation. Bulgaria will also cease the importation of Russian crude oil on 1 March 2024.

Crude Oil

The embargo came into effect on 5 December 2022 with a 45-day transition period, all ships had to load by 5 December 2022 and unload at the destination port before 19 January 2023.

Around 100 tankers are under investigation by the US in November 2023, with management companies being asked to provide evidence that the price cap has not been breached by the tankers. The EU/G7 countries put pressure on crude oil tanker flag countries in late 2023 to run better checks that their crude oil tankers are not breaching the $60 price cap limit.

Ships believed to be in violation of the embargo

Tons delivered and numbers of crude oil tankers identified in probably being in violation of the embargo, in 2023, through direct delivery or transshipment:

Transshipments of crude oil from Russia

Transshipments of crude oil have involved ships belonging to companies from Cyprus, Greece, India, Indonesia, Liberia, Turkey and the UAE, flying under flags of Liberia, Malta, Palau, Panama, Marshall Islands and Turkey. |

Direct shipments of crude oil from Russia to a sanctioning country

The following oil tankers have been identified as probably being in violation of the embargo by transporting crude oil directly from a Russian port to an EU/G7 port in 2023 by the Monitoring Group of BlackSeaNews and the Black Sea Institute of Strategic Studies.

Note △ In November 2023 Thenamaris Ships Management Inc, Minerva Marine and TMS Tankers, all major Greek shipping companies, announced they had ceased all shipments of Russian oil, to avoid U.S. sanctions.

Oil products

The embargo came into effect on 5 December 2022 with a grace period, all ships had to load by 5 February 2023 and unload before 1 April 2023.

Ships believed to be in violation of the embargo

Tons delivered and numbers of product tankers identified, probably in violation of the embargo in 2023, through direct shipment or transshipment of the product:

Transshipments of oil products from Russia

Transshipments of oil products have involved ships belonging to companies from Denmark, Germany, Greece, India, Liberia, Marshall Islands, Malta, Russia, Seychelles, Singapore, Turkey and the UAE, flying under flags of Cook Islands, Gabon, Liberia, Malta, Marshall Islands, Palau, Panama, Russia, Seychelles, Singapore, St Kitts and Nevis.

Direct shipments of oil products from Russia to a sanctioning country

The following oil product ships have been identified as probably being in violation of the embargo on seaborne imports of Russian oil products into the EU/G7 by the Monitoring Group of BlackSeaNews and the Black Sea Institute of Strategic Studies.

Enforcement of sanctions

In autumn 2023 the US and UK began applying sanctions against entities complicit with breaches of sanctions

Management companies of tankers

The management of "dark fleet" tankers are regularly changed by Russia in an effort to avoid sanctions. Lloyd's List defines a tanker as "dark fleet if it is aged 15 years or over, anonymously owned and/or has a corporate structure designed to obfuscate beneficial ownership discovery, solely deployed in sanctioned oil trades, and engaged in one or more of the deceptive shipping practices outlined by US State Department guidance issued in May 2020."

Sanctioned shipmanagement companies

The UK Government have sanctioned the following management companies under the Sanctions and Anti-Money Laundering Act 2018:

• ♦ Companies have been moving tankers to other managers including One Moon Marine Services LLC.

The US Government have sanctioned the following management companies being designated pursuant to E.O. 14024:

Insurance of tankers

Suspected breaches of sanctions by insurance companies are investigated. Sometimes the insurance company is provided with false information regarding the source of the cargo, its price, the destination, and even the ships name and IMO number when an application for insurance is made.

In December 2023 an insurance company Continental Steamship Owners Mutual Protecting & Indemnity Association Ltd. incorporated in the Marshall Islands, but based in Estonia, was “forcibly dissolved”. The company was insuring 27 elderly, anonymously owned tankers, 10 of which appear to have been using fraudulently issued IMO company numbers.

Flag state and tankers

Suspected breaches of sanctions by flag states are investigated. Pressure is being put on nations to increase oversight of ships carrying their flags, both to ensure they do not breach sanctions but to also enforce safety and environmental standards.

Most tankers suspected of breaching sanctions since 2021 fly the flag of Liberia, Liberia's flag registry is administered by a private US company based in Virginia, USA, as is the Marshall Islands flag. Panama, Gabon, the Cook Islands, Palau and Vietnam all flag more than 5% of tankers suspected of breaches.

Cameroon flagged ships were banned from entering United Arab Emirates ports due to safety concerns from January 2024, many of their tankers are old and ply their trade with Russia whilst having a poor safety record.

Sale of tankers

Sanctions announced in December 2023 require notification rules to be followed for the sale of tankers to any third country to make it transparent in an attempt to identify tankers that could be used to evade the import ban on Russian crude or petroleum products.

See also

• 2022 Russian crude oil price cap sanctions – Economic sanction following the Russian invasion of Ukraine
• 2023 Russian oil products sanctions and price cap – Economic measures following the Russian invasion of Ukraine
• International sanctions during the Russian invasion of Ukraine – Economic measures against Russia and Belarus since 2022

References

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2. "OFAC Guidance on Implementation of the Price Cap Policy for Crude Oil of Russian Federation Origin". 22 November 2022.
3. "UK and coalition partners announce price caps on Russian oil products". Retrieved 4 February 2023.
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6. "Russia's ships half of all crude, oil product exports to China in 2023". 27 December 2023.
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12. "Bulgaria accelerates end of sanctions loophole that earned Russia €1B". 17 November 2023.
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22. ^ "Violations of the embargo on the imports of crude oil from Russia into the EU in October 2023". 7 November 2023.
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40. ^ "UK sanctions four companies linked to 82 tankers in Russian oil trades". 7 December 2023.
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42. "Treasury Tightens the Price Cap with New Sanctions and Updated Guidance". 20 December 2023.
43. "US Sanctions UAE Shipping Firm for Violating Russian Crude Oil Price Cap". 18 January 2024.
44. "A shadow-fleet oil tanker that falsified its location and carried Venezuelan crude got stuck near Singapore". 8 December 2023.
45. "Questions raised over dark fleet Estonia P&I coverage". 11 December 2023.
46. "Shadow-Fleet Oil Tanker Insurer Gets Shut Down by Marshall Islands". Bloomberg. 13 December 2023.
47. "Russia's Shadow Fleet Is an Environmental Disaster Waiting to Happen". 4 December 2023.
48. "Pressure grows on Liberia and Marshall Islands to take action against the dark tanker fleet". 14 December 2023.
49. "UAE Bans Tankers Flying Cameroon Flag On Safety Concern". 9 January 2024.
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• Sanctions and boycotts during the Russo-Ukrainian War
• International sanctions
• Sanctions against Russia
• Reactions to the Russian invasion of Ukraine
• 2023 in international relations