EU seeks G7 coordination on maritime services ban on Russian seaborne oil
Sign up now: Get ST's newsletters delivered to your inbox
The proposed ban is much more extensive than the piecemeal sanctions EU has imposed so far to limit Russia's key source of income.
PHOTO: REUTERS
BISHKEK, Kyrgyzstan – The European Union (EU) needs to coordinate its plan to impose a full maritime services ban on Russia’s seaborne crude oil exports with other Group of Seven (G7) countries before pushing ahead with the measure, the EU’s sanctions envoy David O’Sullivan said on Feb 26.
The European Commission proposed a sweeping ban on any services that support Russia’s seaborne crude oil exports on Feb 6, going far beyond previous piecemeal EU sanctions in its effort to stunt Moscow’s key source of income for its war on Ukraine.
“I think the European Union has made clear that for the moment we are applying the oil price cap, which has just recently been reduced to US$44 a barrel.
“Russia’s revenue from oil and gas is down dramatically in recent months, and we will continue that policy,” Mr O’Sullivan told a news conference in Bishkek, Kyrgyzstan.
He said the EU is in favour of a maritime services ban, but needs to coordinate with G7 colleagues before a decision is taken, and talks will be held in the coming days and weeks.
Among G7 countries, the EU is most concerned about US support for the measure, diplomats have said.
Russia exports over a third of its oil in Western tankers – mostly from Greece, Cyprus and Malta – with the help of Western shipping services.
The proposed ban would end that practice, which mostly supplies India and China, and render obsolete a price cap on purchases of Russian crude oil that the G7 has tried to enforce, with mixed success.
The Commission 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.
The G7 first set a price cap for Russian crude in 2022, and in 2025, the EU and a coalition including G7 members Britain and Japan lowered the cap to reflect falls in market prices.
It now sits at US$44.10 a barrel, compared with US$64 currently for Iraq’s similar Basra Medium blend.
The US shunned this coalition, although it did add Russia’s top two oil companies, Rosneft and Lukoil, to its list of sanctioned entities subject to full asset freezes, which the EU has not done. REUTERS
