EU proposes to sanction Sovcomflot to limit Russia’s revenue

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The European Union is proposing to sanction Russia’s oil-shipping giant Sovcomflot PJSC in a move to limit the Kremlin’s ability to finance its war against Ukraine, according to a document seen by Bloomberg.

State-owned Sovcomflot, the largest shipping company in Russia, has been one of the key companies helping to transport Russian oil amid western restrictions imposed on the country following its invasion of Ukraine in 2022. The company also provides offshore upstream services and seaborne transportation of liquefied natural gas.

In response to Russia’s war in Ukraine, the Group of Seven industrialized nations’ imposed a price cap on Russia’s crude and oil products exports to limit the country’s access to western shipping and insurance services. Moscow has adapted to restrictions, including a European Union ban on Russian oil imports, by using a massive shadow fleet of tankers and selling its oil to Asian clients.

The European proposal follows a US decision earlier this year to sanction Sovcomflot and 14 crude oil tankers identified as being linked to the company in a bid to squeeze oil sales. The possible EU sanctions require the backing of all member states to be approved, and the plan could change before then.

The European Union is also proposing to sanction 13 vessels involved in shipping goods and technologies used in the defense and security sector as well as in transporting oil and petroleum products or contributing to the expansion of Russian energy sector.

Source: Bloomberg