On 18 July, the European Union (EU) announced its 18th sanctions package against Russia and Belarus. This is perhaps the most comprehensive package to date, including vessel designations, sanctions targeting the shipping value chain, and an import ban on refined products entering the EU. Most significantly, the EU finally announced the expected reduction in the Oil Price Cap (OPC). 

The EU designated 105 vessels, which brings the total number of vessels sanctioned by the EU to 444. The designated vessels have been cited for circumventing the oil price cap, transporting military equipment on behalf of Russia and transporting suspected stolen Ukrainian Grain.

The EU has also placed asset freezes, travel bans and bans on providing services on shipmanagers, traders, the Indian Nayara refinery with Rosneft as its main shareholder, a Captain of a “shadow fleet” vessel and Intershipping Services, the UAE based operators of the Gabon and Comoros registries. 

An import ban has been placed on refined products, refined from Russian crude in a third country, entering into the EU. The ban will not apply to imports from Norway, Britain, the U.S, Canada and Switzerland.

Significantly, the EU also announced a reduction in the price cap for crude oil from USD 60 to USD 47.6 per barrel. The EU announced that the reduction in the OPC was decided upon to align with the current oil price. The UK will also lower its price to USD 47.6 per barrel. The reduction will take effect on 3 September with a wind-down period running until 17 October.  The EU also announced that the OPC reduction will mark the start of a dynamic mechanism with the objective of keeping the cap 15% lower than the average market price for Urals crude in the previous six month period. There is currently no information regarding whether the US administration will align with the OPC reduction.

Kaja Kallas, High Representative for Foreign Affairs and Security Policy & Vice President of the European Commission said:

“The EU just approved one of its strongest sanctions packages against Russia to date. Each sanction weakens Russia's ability to wage war. The message is clear: Europe will not back down in its support for Ukraine. The EU will keep raising the pressure until Russia ends its war.” 

On 21 July, the UK sanctioned 135 tankers cited for involvement in the illicit trade in Russian oil, LITASCO Middle East DMCC and followed the EU by sanctioning Intershipping Services LLC.

David Lammy, UK Foreign Secretary said:   

“New sanctions will further dismantle Putin’s shadow fleet and drain Russia’s war chest of its critical oil revenues.

As Putin continues to stall and delay on serious peace talks, we will not stand idly by. We will continue to use the full might of our sanctions regime to ratchet up economic pressure at every turn and stand side by side with Ukraine.” 

 

For a link to the EU press release announcing the 18th Sanctions Package, click here.

For a link to the UK Gov press release announcing the reduction in the OPC, click here.

To learn more about KYC and the Baltic Know Your Customer (KYC) Platform,  click here.