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European shipping companies are “mocking” Russia’s sanctions as oil cargo doubles

European companies have almost doubled Russian oil supplies since Vladimir Putin’s inauguration invasion of Ukrainedespite desperate efforts by EU leaders to squeeze the Kremlin’s military machine, blocking Russian exports from world markets.

Campaigners said EU-based shipping companies had “mocked” plans to impose sanctions on Russia, and warned that a partial oil embargo announced this week would do little to hurt Putin or reduce the war.

The condemnatory assessment became an exclusive new analysis that saw The Independentshowed the extent to which shipping companies based in Greece, Cyprus and Malta have increased traffic Russian oil worldwide in recent weeks, taking advantage of big jumps in rates on tanker cargo.

The supplies have boosted Putin’s coffers by billions of dollars in oil revenues, providing vital funds for Russia’s brutal war, figures show.

While EU leaders finally reached an agreement this week on a relaxed embargo on Russian oil, European tankers laden with Russian oil have been making increasingly lucrative trade.

An analysis of Refinitiv delivery data by anti-corruption group Global Witness shows that three major European shipping countries – Greece, Cyprus and Malta – have rapidly increased the amount of Russian oil they have transported each month since the start of the war.

In February, when Mr. Putin’s troops invaded Ukraine, companies and vessels associated with the three countries delivered 31 million barrels of Russian oil. In May, the figure jumped to 58 million barrels. In total, since February, ships bound for Greece, Malta and Cyprus have transported 178 million barrels worth $ 17.3 billion (13.9 billion pounds) in current Russian oil prices.

At the beginning of the war, ships associated with these countries transported just over a third of oil exports from Russian ports. By May, that figure had jumped just over half.

Greek, Maltese and Cypriot ships and companies have almost doubled the amount of Russian oil they carry

(Global Witness)

Anastasia Fedik, a professor of finance at the Haas School of Business in California, Berkeley, said the findings were “very exciting.”

“The European Union has leverage over Russia because of inelastic energy supplies: it is difficult and expensive for Russia to redirect its energy somewhere. Allowing EU-flagged ships to transport Russian oil thus only undermines the EU’s own negotiating capabilities.

“The oil embargo should be an oil embargo, and it is not an oil embargo,” said Ms. Fedik, who is a member of the International Working Group on Russian Sanctions and co-organizer of the Economists for Ukraine initiative.

“This is a policy that will partially reduce oil supplies while contributing to some structural changes in the oil logistics industry,” she said.

The European Commission finally announced plans Tuesday to ban maritime imports of Russian oil into the bloc, but measures will be phased in over several months and have been significantly weakened as a result of disputes between EU member states.

Europe has continued to supply Russian oil despite efforts to shrink the country’s economy

(AP)

Russian oil will continue to flow to Europe via Hungary, and after lobbying by shipping companies in Greece, Malta and Cyprus, EU-registered vessels and companies will be allowed to continue transporting oil from Russian ports to non-EU countries.

This means that EU companies can continue to profit from facilitating the transportation of Russian oil to countries such as India and China, which have become willing buyers of crude oil, which Europe no longer wants.

China is now a leading importer of Russian oil, increasing purchases since the start of the war.

As many companies have since given up on Russian oil, a minority of companies wishing to continue supplying it may charge a fee. As of Friday, a large tanker leaving Primorsk could raise $ 32,500 a day compared to less than $ 10,000 before the invasion, a source in the shipping industry said.

Experts and campaign participants have warned that the refusal of European leaders to stop EU-controlled ships carrying Russian cargo will leave a hole in the partial embargo.

The EU’s refusal has also punished European consumers because markets have been pushing oil prices for weeks in anticipation of a tough embargo, Ms Fedik said.

“Ordinary citizens in European countries paid more for Russian oil, not actually punishing Russia, but in fact only increasing Russia’s income in the face of the war, as the Russian Ministry of Finance openly boasted,” she said. The exclusion of maritime sanctions is counterproductive and needs to be urgently reconsidered, Ms. Fedik added.

While some companies, such as Shell and BP, sought to publicly distance themselves from the Russian oil and gas industry, others intervened to eliminate the breach. Among them are companies owned by some of Greece’s wealthiest oligarchs shipping.

There is no suspicion that any of the companies or their owners have violated sanctions or the law. But those figures raise questions about the effectiveness of international efforts to financially oppress the Putin regime and end the bloodshed in Ukraine.

Former Greek Finance Minister Yannis Varoufakis says Greek shipowners were interested in blocking the cessation of Russian oil supplies

(AFP / Getty)

Former Greek Finance Minister Yannis Varoufakis has said the country’s shipowners are interested in blocking any interruptions in Russian oil sales.

However, he argued that the industry makes a “practical contribution” to the Greek economy because its vessels are often registered in other countries and profits are kept abroad, beyond the reach of the Greek government.

Louis Godard, a senior adviser on data investigation at Global Witness, said: “Since the invasion of Ukraine, European oil tankers have not just continued the deadly trade in Russian oil: they have increased it.

“Ships bound for Greece, Cyprus and Malta are mocking the EU’s efforts to impose sanctions on Putin’s military machine, supporting the flow of money to Russia as the country’s armed forces continue to beat Ukraine.

“To close this loophole, the EU must strongly oppose lobbying by all member states interested in trading in Russian oil and put restrictions on shipping at the heart of its sanctions regime.”

Benjamin L. Schmidt, a researcher at Harvard University and a senior fellow at the Center for European Policy Analysis, said Europe’s inability to completely ban Russian oil meant “Moscow would continue to feel insufficient pressure to accept its constant atrocities against Ukrainian sovereignty.”

Consumers suffer from record fuel prices, while Russian oil companies make big profits

(PA)

As oil prices rose sharply, the Kremlin received a huge increase in its finances, recording a record current account surplus in April.

The Russian government is on track to generate an unprecedented $ 250 billion in cash flow this year, said Clay Lowery, vice president of the Institute of International Finance.

“This massive inflow of hard currency means rich liquidity and thus low interest rates, which keep Russia’s finances more stable, even as its economy deteriorates,” he said.

He added that the maritime embargo could be the key to preventing oil exports to be diverted to countries such as China and India.

European shipping companies are “mocking” Russia’s sanctions as oil cargo doubles

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