EU allows member states to sell confiscated Russian oil, media reports
Photo: EU steps up pressure on Russia's shadow fleet (Getty Images)
The European Union will allow member states to sell Russian oil confiscated from vessels caught trying to evade the bloc's sanctions, according to Euractiv.
What the new sanctions package allows
European Commission officials confirmed on Thursday, shortly after EU diplomats reached an agreement, that the new sanctions package against Moscow allows member states to sell crude oil and other cargo seized from vessels belonging to Russia's shadow fleet, which is used to circumvent the G7 oil price cap.
"A very important provision" will allow member states to confiscate cargo transported by the shadow fleet after vessels are boarded as part of a maritime operation, one EU official said.
Such seizures are becoming increasingly common. According to the official, the main unresolved issue had been what to do with the cargo, since "it is a very valuable commodity." While oil is Russia's most lucrative export, confiscated grain cargoes could also be sold under the same mechanism.
Examples of vessel seizures
In March, Belgium seized a tanker in the North Sea suspected of belonging to Russia's shadow fleet. The vessel was carrying about 330,000 barrels of oil worth up to $26 million at current market prices.
Last month, France took control of another similar vessel carrying about 600,000 barrels of oil worth approximately $48 million shortly after it had been loaded in Murmansk.
Moscow has described such vessel seizures as "piracy" and threatened to respond "by all necessary means."
What else happened at sea
EU High Representative for Foreign Affairs and Security Policy Kaja Kallas also said that the Russia-linked vessel MV South Star was boarded by European maritime security officers in the Mediterranean Sea on July 20 for a "flag inspection."
"Every illicit voyage helps sustain Russia’s war machine. We are matching our sanctions with action at sea," Kallas said.
What else the sanctions package includes
The sanctions package adopted on Thursday is the EU's 21st since Russia launched its full-scale invasion of Ukraine in 2022. It also freezes the oil price cap for 12 months. The cap prohibits EU companies from providing services, including insurance, to Russian tankers selling oil above the established limit.
The price cap currently stands at $44 per barrel, although without the new agreement it would have increased to $58 per barrel.
According to EU estimates, the price cap will cost the Kremlin $3.5 billion in lost oil revenue over the next year. The estimate is based on an assumed Urals crude price of $60 per barrel.
At the beginning of July, Urals crude was trading at around $50 per barrel. Since then, however, the price has climbed to about $80 per barrel amid the renewed escalation of the US conflict with Iran.
