European ports have been officially closed to Russian ships, only a few ships on the exceptional list have been allowed to dock. But the reality is quite different. Russia's oil business, in particular, is booming again as it was before the war began, largely because one European country has a "record" of sabotaging agreements.
Russia's wartime economy finally seemed to be in trouble when the European Union announced its fifth sanctions package on April 8th: the EU decided that Russia's 2,873 merchant ships would no longer be allowed to dock in European ports.
The EU also included a list of exceptions, such as Russian ships carrying food, medical supplies energy. However, the Commission warned that member states should only make "limited exceptions provide rigorous explanations".
Oil is moving almost unimpeded
Four weeks later, the sanctions regime is no longer well explained. In particular, Russian energy giants Rosneft Lukoil continue to operate their oil business entirely unimpeded through European ports.
"Since the war began on February 24, Russia has exported an estimated 4.5 million barrels of crude oil per day, worth about $509 million." Lloyd's Daily, an authoritative media in the international shipping industry, reported.
Russia's oil exports have returned to pre-war levels. This is mainly due to Greece, which, as the story writes, "while many European American dealers, oil companies shipping lines have cut all ties with the Russian shipping industry, the Greek shipping industry continues to expand their business with Russia."
For Russian oil sellers, shipping has become more important as fewer exports flow through pipelines. German refiners, for example, have sharply reduced their purchases of crude oil through Russia's Druzhba pipeline. That is why Russian oil companies often have to ship their crude oil halfway around the world to find buyers.
The Greek supertanker Nissos Rhenia, for example, loaded Russian Urals at the port of Rotterdam in late April set sail for Singapore, Lowe's Daily reported. A growing number of tankers now also call for India, China South Korea. Tanker rates have risen 230 percent because of the conflict in Ukraine.
It tripled its market share
Greece, as the world's biggest shipowner, is benefiting accordingly. According to Lowe's Daily, 190 tankers set sail the Russian oil ports of Primorsk, Novorossiysk, Ustiruga St. Petersburg in April, 76 of them flying the Greek flag. That means Greek ships have tripled their share of Russian oil shipments compared with the previous year.
Richard Mead is a London-based Lloyd's Daily reporter who monitors the tanker market. He is in close contact with many Greek shipowners, whose self-perception goes something like this: "We are humble taxi drivers go our superiors send us." In their view, providing services to Russian oil exporters is a formal violation of EU sanctions.
But Ukraine doesn't see it that way. A Russian tanker tracking team has been set up in Kiev, with the participation of Ukrainian government officials, to meticulously record the voyage of every tanker entering leaving Russia, using freely available online data.
Oleg Ustenko, an economic adviser to Ukrainian President Volodymyr Zelensky, spoke on the platform of Global Witness, a prominent NGO. "Companies that continue to knowingly finance Russian 'war crimes' with oil contracts should know that Ukraine is pursuing all possibilities to hold them accountable."
Ukraine's prosecutor general, Iryna Venediktova, announced in an interview with Lloyd's Daily that she was already preparing legal measures against companies individuals involved in Russian oil business.
"Blood will pay" ranking
However, as long as energy shipments are explicitly excluded the EU ports ban, the action is unlikely to have any legal basis. So, in the meantime, the Tanker tracking team is trying to apply additional public pressure via the "Blood-oil.today" website.
Ukrainian organizers use the site to track daily shipping routes. According to the tracking data, countries near the top of the "blood on the table" ranking, namely Z, which regularly hosts Russian tankers, are under fire, such as the Netherlands, Turkey India.
They converted revenues Russian oil exports since the war began into weapons equipment. Russia could theoretically buy 21,000 tanks, 31m AK47 assault rifles 83bn rounds of ammunition with oil revenues of $509m a day. Germany ranks 14th on the list, buying 85,506 barrels a day Russia.
The money transferred to Russia would be enough to buy 469 tanks, the website said. Little wonder, then, that the decision on May 6th to deliver seven self-propelled howitzers by Germany hardly satisfied Ukraine's critics.
Greece announces boycott
It is clear whether that pressure contributed to the EU's decision now to draw up a sixth sanctions package. Under proposals put forward this week by European Commission President Ursula von der Leyen, all oil imports Russia would be banned for six months, whether by pipeline tanker.
At a meeting of EU ambassadors in Brussels on May 11, Greece announced the boycott illustrated the importance of the tanker business to the country: If Asian shipowners provide Oil shipments to Russia, Greece stands to lose a lot of revenue. The Greek ambassador did mention that His country has 716 oil tankers, a fleet larger than China, Japan, South Korea Singapore combined.
If the EU decides unanimously to impose a total embargo, It will be hard for Russia to make up for the loss of oil export revenues elsewhere. Economists estimate that the impact of a lack of oil export revenue on Russia's state budget would be three to four times greater than the loss of natural gas revenues.
So Mr Putin has reacted sensitively: he has signed a decree for "economic retaliation" against the West. Under the decree, Russian products raw materials could no longer be sold to individuals companies on the Russian government's sanctions list, obligations to Western business partners could be denied. The Kremlin will soon announce which Western companies will be sanctioned.
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Source: Guanchan.com
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