Russia’s oil may be ‘off the market’, according to UK politicians under pressure to tighten the screws on Moscow, but the shipping industry is still tied to a contradictory and apparently redundant oil price cap that should now be scrapped, reports Lloyd’s List.
Shipping is caught between policy and legislation
Donald Trump’s increasing frustration with Vladimir Putin and a looming oil glut have resulted in a significant shift in sanctions targeting Russia.
While previous efforts from the US, UK and EU have sought to keep Russian crude flowing, albeit at a discounted price point, the attitude from senior policy officials within sanctions departments in all three regimes seems to be that Moscow’s oil should now to be considered “off the market”.
The problem for shipping is that while policy attitudes may have shifted, the legislation has not, and shipping is getting caught in the gap.
The inclusion of three Dynagas-managed liquefied natural gas carriers in the most recent round of UK sanctions targeting Russia, apparently despite engaging in entirely lawful trades, has left shipowners, insurers and lawyers deeply concerned that they are about to become sanctions targets.
Dynagas principal George Prokopiou and his lawyers had initially considered the designation of a trio of 2014-built LNG carriers on 15-year charters to Yamal Trade in Singapore, a marketing and chartering arm for Russia’s Yamal Arctic gas project, to be an “unfortunate mistake”.
After all, the Yamal terminal is not sanctioned by the UK, the cargo is not sanctioned, the charterers are not sanctioned, so why designate three tankers that had been trading lawfully?
While neither Prokopiou nor the UK government are publicly commenting on the status of Dynagas’ bid to have the ships removed from the sanctions list, Lloyd’s List understands that the ships were never considered to have engaged in anything approaching an unlawful act.
Instead, they were targeted as part of a bid to disrupt and destabilise Russian gas revenues.
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Source: Lloyd’s List
