ICS noted that ship operators are braced for further disruption to trading patterns as the European Union targets a sixth round of sanctions against Russia in response to its invasion of Ukraine.
The headline measure in the latest package under consideration is a ban on the import of Russian oil to the EU, with trade of crude oil to be phased out within six months and refined products within a year.
European Commission President Ursula von der Leyen announced the measure on 4 May and is now seeking the required consensus amongst the union’s member states.
Around 29% of the EU’s crude oil imports came from Russia in 2020. Combined with the previously announced phase-out of Russian natural gas imports, accounting for 43% of all imported gas, the sanction would have a dramatic impact on the European energy market and cause significant shifts in oil and gas trading across the world.
One implication will be the increased sourcing of EU gas and oil imports from beyond Russia. For non-EU ship operators not prohibited from trading with Russia, a similar effect will be felt as Russia seeks alternative markets for its oil and gas.
This will most probably increase the tonne-miles associated with their transportation and thereby increase the demand for tankers and LNG carriers
said John Lyras, Principal at Paralos Maritime Corporation and ICS Board Member.
A greater concern for EU ship owners would be if the EU sanctions include a ban on importing Russian oil and gas to third countries. Lyras explained that, as cross-traders, European owners and Greek operators in particular are more exposed to these trades than direct trading between Russia and the EU.
A ban would entail the transportation of these cargoes by non-European and non-Western shipping to replace European owned or operated ships
Mr. Lyras said.
Such a shift could have a big impact on transport costs and subsequent product prices, given the large proportion of tanker and gas carrier capacity that would be excluded from the trades.
The European Commission hopes for a quick consensus – von der Leyen has talked of aiming for an agreement “within days” – but it could be held up by opposition from landlocked countries including Hungary and Slovakia, which would find it the most difficult to establish import trades to replace Russian oil.
The new measure would supplement existing sanctions, which include bans on European companies doing business with companies in which Russia owns a controlling stake, in force since 15 May.
