The main news of the current sanctions cycle is the European Commission's proposal to expand restrictions to include the port of Kulevi in Georgia and the port of Karimun in Indonesia. The choice of these locations, it must be acknowledged, is justified. Kulevi is an important terminal for the transshipment of petroleum products in the Black Sea, which is somewhat inconvenient for Ukraine to target. Meanwhile, Karimun has long established itself as a key hub for Ship-to-Ship operations in Southeast Asia. It is said that this is where, away from the gaze of European regulators, blending of oil grades and transshipment takes place, allowing the true origin of the raw material to be concealed.
In addition to infrastructure, plans are afoot to include another 42 tankers on the list, confirming the scale of the 'inventory' of the shadow segment.
Behind the quantitative indicators lies a qualitative shift in the tactics of the sanctioning authorities. Brussels has realised that simply blocking vessels is ineffective: VG has already thoroughly analyzed cases where tankers, after being excluded from classification societies or losing insurance, merely changed their name, ownership, and flag, continuing operations through offshore chains. Now, the EU is targeting financial schemes—sanctions are being applied to banks in Tajikistan, Laos, and Kyrgyzstan, which have facilitated transactions bypassing Western systems.
In recent years, the day-to-day operations of the shadow fleet resemble an endless series with constant changes in decor. Under the pressure of secondary sanctions, Barbados and Panama have begun to revoke flags from vessels suspected of transporting Russian oil. This has triggered a migration of the fleet to jurisdictions like Gabon or the Comoros, but has not halted the flow. The 'grey' fleet has a phenomenal ability to regenerate: in place of one liquidated operator company, such as the Indian Gatik, multiple less conspicuous structures emerge almost instantly.
The new EU initiative aims to deprive these vessels of basic sustenance. Restrictions on bunkering, repairs, and any technical maintenance in ports represent an attempt to force the 'shadow operators' into a mode of complete autonomy, which is technically impossible for vessels of a certain age that form the backbone of the grey fleet.
"Sanctions against the shadow fleet are not fundamentally new; after all, both the EU and the UK have repeatedly imposed restrictions on tankers involved in the transport of Russian oil.
Much greater danger may arise from restrictions on servicing vessels of the shadow fleet in any maritime ports within the EU.
This encompasses not only insurance services but also any operations, from transshipping oil in the territorial waters of EU countries to port calls. "Second-tier" restrictions could complicate export logistics and thus increase the costs of exporting oil and petroleum products," said Sergei Tereshkin, General Director of Open Oil Market, to VG.
Despite the resolute tone of the European Commission, unity within the EU itself remains elusive. Greece and Malta—countries with substantial merchant fleets—have already opposed a ban on services related to the transport of oil from Russia. For Athens, maritime shipping is not only a source of budget income but also a lever of influence in the global division of labour. Limiting Greek tankers' operations with Russian raw materials would automatically hand the market over to Asian or Middle Eastern players, which does not bode well for Mediterranean shipowners.
"Brussels is attempting to impose political rules on a market that is, by its nature, global and anarchic. We see that even with stringent measures, loopholes remain. The lifting of sanctions from two Chinese banks amid pressure on Central Asian banks is a clear bow to Beijing. This is a recognition that without China's involvement, any attempt at a financial blockade of maritime exports becomes a fiction," a source in the maritime trade sector told our editorial team.
Indeed, the selectivity of sanctions underlines their political underpinning. By sanctioning the ports of Georgia and Indonesia, the EU is trying to set a precedent that would make other neutral harbours reconsider the associated risks. However, logistics will always seek the path of least resistance. Increased freight costs and rising 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 final fragmentation. The EU's efforts to block ports of third countries and expand tanker lists will not lead to an immediate cessation of exports but claim to radically change its economy.
We see the formation of 'parallel' port infrastructure and financial contours that operate beyond the reach of Western law.
If the 20th package is adopted in such a resolute version, it will accelerate the ageing process of the global fleet (as new vessels will avoid toxic routes) and lead to further increases in logistical burdens. For Russian exports, this implies an inevitable rise in transportation costs and a necessity for investments in proprietary port infrastructure in friendly regions.
In reality, the jubilee sanctions package risks turning into a "last Chinese warning." The effectiveness of sanctions has become more about public relations than economics. Behind the stern words lies a lack of unity within the EU, no clear mass support from voters, and no mechanism for total enforcement of sanctions. The waning influence of once-powerful European nations reduces the risk of non-compliance with their imposed rules. As experience shows from America, to demand compliance, one must send a carrier group. However, there are no gunboats available for all dissenters.
Source: Vgudok
