Brussels back-tracks on shipping ban for Russian crude after Malta, Greece protests

The European Commission shelved plans to ban the EU shipping industry from carrying Russian crude in its latest sanctions package, after protests from shipping register member-states that included Malta.

A proposal targeting shipping that was introduced last week was dropped by the European Commission following hard lobbying from Malta and Greece, which is home to more than half of the EU flag tonnage.

Hungary is also withholding its backing from a proposed EU ban on imports of Russian oil, even after talks between commission president Ursula von der Leyen and Hungary’s prime minister, Viktor Orbán.

The proposed shipping ban was seen as a way of making it more difficult for Vladimir Putin to mitigate the effects of an EU oil ban by transporting crude to other countries around the world. However countries like Malta said the effective shipping ban should involve other countries such as the UK and the US, which can influence other major flag-states such as Liberia, the Marshall Islands and Panama.

The Financial Times reported that the lack of agreement among the G7 nations was central to the proposal being dropped.

The Commission also proposed a ban on European companies providing the services, including insurance, that are needed to transport Russian oil around the world. Targeting maritime insurance is a powerful tool because most Russian oil exports are transported via tanker and the largest specialist insurers for the sector operate primarily in western countries.

Most ports require vessels to have P&I (protection and indemnity) certification, and buyers of Russian oil would risk hundreds of millions of dollars without insurance.