The main news of the current sanctions cycle is the European Commission's proposal to extend restrictions to the port of Kulevi in Georgia and the port of Karimun in Indonesia. The choice of these locations is, without a doubt, justified. Kulevi is an important terminal for oil product transshipment in the Black Sea, which Ukraine finds difficult to attack. Meanwhile, Karimun has long established itself as a key hub for Ship-to-Ship operations in Southeast Asia. It is said that there, away from the eyes of European regulators, oil grades are mixed and transferred, allowing for the concealment of the true origin of the raw materials.
In addition to the infrastructure, the lists are set to include an additional 42 tankers, confirming the extensive scale of “inventory” in the shadow segment.
Behind the quantitative indicators lies a qualitative change in the sanctions' tactics. Brussels has recognized that a simple blockade of ships is ineffective: VG has extensively analyzed cases where tankers—after being excluded from classification societies or losing insurance—simply changed their names, owners, and flags, continuing operations through offshore chains. Now, the EU is targeting financial schemes—sanctions are being implemented against the banks of Tajikistan, Laos, and Kyrgyzstan, which were facilitating transactions bypassing Western systems.
The day-to-day operations of the shadow fleet in recent years resemble an endless series with constant changes in scenery. Under the pressure of secondary sanctions, Barbados and Panama have begun to withdraw flags from vessels suspected of transporting Russian oil. This has prompted a migration of the fleet to jurisdictions in Gabon or the Comoros, but has not halted the flow. The "gray" fleet possesses a phenomenal ability to regenerate: in the place of one liquidated operating company, like the Indian Gatik, several less noticeable structures instantly emerge.
The new initiative from the EU aims to deny these vessels the means for basic operation. Restrictions on bunkering, repairs, and any maintenance in ports are an attempt to push the "shadow players" into a state of complete autonomy, which is technically impossible for older vessels comprising the backbone of the gray fleet.
“Sanctions against the shadow fleet are not fundamentally new: after all, both the EU and the UK have repeatedly imposed restrictions on tankers transporting Russian oil.
Much greater danger could arise from restrictions on servicing shadow fleet vessels in any marine ports within the EU.
This includes not only insurance services but also any other operations, from oil transshipments in the territorial waters of EU countries to port calls in marine ports. 'Second-type' restrictions could complicate export logistics, thus increasing the costs of exporting oil and oil products,” said VG Sergey Tereshkin, CEO of Open Oil Market.
Despite the resolute tone of the European Commission, there is a noticeable lack of unity within the EU. Greece and Malta—countries with significant trading fleets—have already voiced their opposition to the ban on services for transporting oil from Russia. For Athens, maritime shipping is not only a source of budgetary income but also a lever of influence in the global division of labor. Restricting the operations of Greek tankers with Russian raw materials automatically hands over the market to Asian or Middle Eastern players, which does not inspire optimism among Mediterranean shipowners.
“Brussels is trying to impose political rules on a market that is inherently global and anarchic. We see that even with the introduction of stringent measures, loopholes remain. The lifting of sanctions from two Chinese banks amidst pressure on Central Asian banks is a clear nod towards Beijing. This acknowledgment that without China's involvement, any attempt at a financial blockade of maritime exports turns into a fiction,” notes a source from the maritime trading industry.
Indeed, the selectivity of sanctions emphasizes their political underpinnings. By penalizing ports in Georgia and Indonesia, the EU seeks to create a precedent that will prompt other neutral harbors to reconsider the associated risks. However, logistics always seeks the path of least resistance. The rising freight costs and increased insurance premiums are factored into the final price; while discounts on raw materials help offset these costs.
The maritime industry is entering a period of complete fragmentation. The efforts of the EU to block ports in third countries and expand the lists of tankers will not lead to an instantaneous halt in exports, but they do aim to radically alter its economic landscape.
We are witnessing the formation of “parallel” port infrastructure and financial contours that operate outside the reach of Western law.
If the 20th package is adopted in such a decisive form, it will accelerate the aging of the global fleet (as new ships will avoid toxic routes) and lead to increased logistical challenges. For Russian exports, this means an inevitable increase in transportation costs and the necessity to invest in its own port infrastructure in friendly regions.
In practice, this milestone sanctions package risks turning into a “final Chinese warning.” The effectiveness of sanctions has become more about public relations than economics. Behind the stern words lies neither unity in the EU, nor clear mass support from voters, nor a mechanism for total control over the enforcement of sanctions. The waning influence of once-powerful European countries reduces the risk of non-compliance with the rules they impose. As American experience shows, to demand something, you need to send an aircraft carrier group. But there are no gunboats for all dissenters.
Source: Vgudok
