The European Commission is proposing to ban the sale of tankers for crude oil and petroleum products to Russia in an attempt to prevent Russia avoiding western sanctions on Russian oil by deploying a shadow fleet of ships that have no links to western finance or insurance.
The EC proposal was discussed on Friday November 17th by ambassadors of EU governments. In an attempt to avoid a getaround that has been used when it comes to shipbreaking, the EC is also proposing that sales of tankers to a third country should include contractual clauses that ships cannot be re-sold to Russia, or used to carry Russian crude oil or petroleum products that avoid western price caps.
Reuters reported that the proposal read: “The price cap mechanism relies on an attestation process that enables operators in the supply chain of sea-borne Russian oil to demonstrate that it has been purchased at or below the price cap. To further support the implementation of, and compliance with, this mechanism while increasing barriers to falsification of attestations, (the proposal) introduces a requirement for attestations to also include itemized ancillary costs, such as insurance and freight”.
The EC said this information should be shared through the supply chain, although it qualified this with the statement that there should be “an appropriate transitional period.”