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31 Jan 2023


EU: European shipping companies continue to finance Russia's war in Ukraine with fossil fuel trades

"Europe continues to finance Russia's war in Ukraine with lucrative fossil fuel trades", 27. January 2023

European ships are still exporting millions of tonnes of fossil fuels from Russia and providing crucial funds for Vladimir Putin's war in Ukraine.

On 5 December, the EU started enforcing an embargo on Russian oil exports. The sanctions were supposed to curtail revenues and at the same time dissuade European shippers from moving fossil fuels to the rest of the world. One month later, an Investigate Europe and Reporters United investigation finds the move is having little impact: Moscow still profits highly from exports and European firms still facilitate much of the trade.

Oil, gas and coal tankers from Europe with almost 16 million deadweight tonnes (DWT) in capacity conducted hundreds of voyages after the latest sanctions took effect. This represents 40% of the DWT of all ship departures. More than 100 of these shipments were destined for ports in Europe.

High-profile Greek shipowners still dominate the trade, while ships operated in Germany, Monaco, Cyprus, Denmark, Italy, Norway and the UK all exported in the past month. The research, which is the latest release from the Fuelling war series, also found that Russia's sanctioned state-run firm Sovcomflot still facilitates European trades via its links to an entity in the United Arab Emirates.

European trade persists

The December sanctions include a ban on seaborne crude oil going to the EU. EU vessels, insurers and others facilitating trades are also barred from sending crude oil internationally unless purchased within a price cap set by the west. A ban on EU imports of Russian coal began in August.

Despite the measures, a host of European firms continue to profit from moving fossil fuels out of Russia. There is no evidence that the trades are illegal, but Europe's persistent business dealings with Russia are ultimately adding millions of euros to the Kremlin's war chest.

Between 5 December and 5 January, 689 fossil fuel shipments left Russian ports internationally. 250 were journeys by European tankers, analysis of the Centre for Research on Energy and Clean Air (CREA) and Equasis data shows. European insurers provided cover for most of them.

Greek shipping magnates

Greek firms were behind 161 trades on tankers totalling 12 million DWT — one-third of the total ship capacity of all exports.

TMS Tankers, controlled by billionaire art donor George Economou, who has a gallery named after him at London's Tate Modern, conducted 11 voyages on ships with more than 1 million DWT. The Andreas Martinos-led Minerva Marine, meanwhile, embarked on 13 trips from Russia with 1.2 million DWT ship capacity. [...]

European shippers and insurers can continue facilitating crude oil trades. But with exports now price capped for global buyers, traders have to prove purchases are legal.

An insurer is named for 60% of the fossil fuel trades which left Russia after 5 December, almost all are firms from the UK, Norway, Sweden or Luxembourg. The International Group of P&I Club, whose members provide coverage for 90% of global seaborne cargo, now faces various compliance challenges when covering trades.