Biden Administration Plans To Sanction 100 More Russian Shadow Fleet Tankers

In its remaining days, the Biden administration is planning to sanction more shadow fleet tankers involved in Moscow’s energy trade, two officials told Reuters.

The U.S has over 200 Russian ships of different types on its blacklist and this final round of designations could make the list longer.

The new sanctions would target tankers from the lightly-regulated fleet which now transports most Russian oil i.e. shipments priced over the G7 cap of 60$ per barrel.

This cap was chosen to restrict the amount of money Russia could earn without cutting down on its export volume, hence keeping global energy supplies and prices stable.

However, Russia’s ESPO oil grade never went below 60$ and Russian Urals exports exceeded the cap, with the help of an increasing fleet of non-western tankers, older than 15 years and flagged in low-governance jurisdictions such as Cook Islands and Gabon.

Per Platts, the Russian Shadow Fleet stands at 600 ships, especially MRs, LRs and Aframaxes, suitable for sailing in the Baltic waters. These tankers, which are already sanctioned, carry over 80% of all Russian oil, raising questions about the effectiveness of the price cap.

The U.S. thinks that sanctions do have some effect as it dissuades many banks, terminal operators, flag registries and suppliers from having connections with sanctioned companies and ships.

Using this approach one last time, Biden plans to impose sanctions on over 100 tankers, oil traders and oil companies including Russian insurance companies.

However, the future of sanctions under Trump remains uncertain. In July last year, Trump expressed his dislike for sanctions, saying ‘it pushes everyone away from us.’

America’s European allies have been analysing how they can maintain a sanctions regime on Russian oil exports in case the coming administrations lift these sanctions.

References: Reuters, Economic Times

Source: Maritime Shipping News