Oil finds support from latest EU sanctions against Russian tankers

The European Union (EU) on Wednesday adopted its 16th package of economic sanctions against Russia aimed at restricting its capability to finance its war in Ukraine.

PHOTO: Flags of the US, Russia and Ukraine. Getty Images

The EU has agreed on a new package of sanctions against Moscow, targeting 73 vessels that are allegedly a part of the Russian shadow fleet used to circumvent the price caps set on Russian crude and oil products.

“The EU is clamping down even harder on circumvention by targeting more vessels in Putin’s shadow fleet and imposing new import and export bans,” Ursula von der Leyen, President of the European Commission (EC) said on social media platform X (formerly Twitter).

This news comes a day after diplomats from Washington and Moscow met in Riyadh, Saudi Arabia, to continue the ongoing negotiations about ending the war in Ukraine. It has lent some support to ICE Brent crude.

The EU had previously sanctioned 79 vessels. The new measures include stricter compliance rules that support the G7 oil price caps set on Russian crude oil and other oil products.

“While similar sanctions from the US on Russia have not led to a significant drop in export volumes, floating storage has increased. This has buyers less willing to accept sanctioned vessels,” two analysts from ING Bank remarked.

The EU has targeted specific vessels that are part of Russia’s dark fleet, which circumvent the G7 Price Cap Coalition’s caps. The coalition is made up of the G7 countries, Australia, New Zealand and the EU.

A dark fleet is typically made up of older and environmentally hazardous vessels that intentionally evade regulations. By assembling a shadow fleet of poorly maintained vessels that are used to circumvent sanctions meant to restrict the movement of Russian crude oil, Russia has effectively traded outside the imposed price caps.

Meanwhile, US President Donald Trump's administration said that it has agreed to hold further talks with Moscow on reaching a ceasefire agreement in Ukraine, following a US-Russia meeting that excluded participation from Kyiv.

By Aparupa Mazumder

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