Maritime trade in Russian oil continues despite sanctions Europe still buys millions of dollars of Russian fuel daily

After Russia’s invasion of Ukraine on February 22, European countries tried to end their energy dependence on Russia, but the process has been slow. Oil embargoes will come into effect no earlier than 2023. Meanwhile, European cargo companies continue to freely transport Russian oil and petroleum products by sea. It’s big business, even for companies whose leadership has repeatedly and publicly denounced the war in Ukraine. And while European imports of Russian energy have generally decreased since the invasion, a few European companies have increased Russian oil imports ahead of winter. This trade brings Russia hundreds of millions in income daily. An investigative project by Investigate Europe and Reporters United, with Meduza’s participation, explains what’s going on.

An project by Investigate Europe and Reporters United, with Meduza’s participation, found that European cargo companies are still importing Russian fuel, despite the fact that their leadership has openly and repeatedly condemned Russia’s invasion of Ukraine.

European countries have been slow to work out how to reduce dependence on Russian fossil fuels in response to the war in Ukraine. In August, EU countries agreed to reduce supplies of Russian gas by two thirds over the course of 2022, and to put a cap on the price of Russia oil. Coal imports were banned. A full embargo on crude and petroleum products won’t take effect until 2023. In May, EU leaders announced plans for a sanctions package against Russia. At the moment, however, companies are able to legally import Russian fossil fuels essentially as they were doing before the war.

Pipelines between Russia and Europe have been shut down since the war in Ukraine began, but maritime shipping routes remain in operation. The investigation found that between the invasion and the end of August, 40 percent of Russia’s seaborne energy exports went to the EU. 

Researchers estimate that energy sales to Europe brought Russia $285 million daily between the invasion and the end of August. The Netherlands were the biggest importer, followed by Italy, France, and Germany. Imports declined sharply after August, though some European nations, including Italy, Greece, and Denmark, continue to import Russian fuel ahead of the winter.

Russian fuel, European ships

Some Russian fuel arrives in Europe on Russian vessels, such as those operated by Volga Shipping. The company is owned by the Russian oligarch Vladimir Lisin, who has spoken out against the war. After the Russian version of this article was published, a spokesperson for Volga Shipping told Meduza that the company “always carries out its business in strict accordance with legal norms and international restrictions” and denied that they circumvent sanctions by transferring cargo to other ships while still at sea.

The majority of Russian fuel travels not on Russian, but on European ships. This investigation found that European oil, gas, and coal vessels departed Russian ports more than 1,500 times between February 24 and August 31, and 570 of those trips occurred after the EU sanctions package was signed in May. Collectively, European ships departing Russia carried 55 percent by weight of the total global trade in fossil fuels. Greek-owned ships alone accounted for 35 percent of the total. 

The Greek shipping industry is particularly powerful – it owns 30 percent of the world’s oil tankers. Greece, Cyprus, Malta, and Hungary reportedly oppose the EU’s sanction plan, and Greece has used its leverage in the shipping industry to weaken Europe’s embargo on Russian oil, and to cancel an embargo on Russian gas. Greece, Cyprus, and Malta have expressed concerns about the economic impact sanctions against Russia would bring to their own countries.

Leaders of several European shipping companies have condemned the war in Ukraine, even as they continue to import Russian fossil fuels. Oldendorff, a German company and one of the world’s largest bulk carrier firms, announced at its 100th anniversary that the company had helped “many relatives and families” of its Ukrainian employees resettle in Germany. But between the invasion and the end of August, at least 20 Oldendorff ships carried Russian coal overseas. French energy giant Total has also used European ships to import Russian fuel, while expressing “outright condemnation” of the war in Ukraine. Total told Investigate Europe that it plans to “halt all purchases of Russian oil and petroleum products as soon as possible and by the end of 2022 at the latest.” Ships from Norwegian, Spanish, Italian, Monocan, UK, Croatian, and Maltese companies also transported Russian fuels between February and August.

Sanctions: economic or moral measures?

Ukraine has pressured the industry to stop carrying Russian fuel since the war broke out. In March, Ukraine also pressured the International Group of P&I Clubs (IGP&I), insurers of 90 percent of the world’s seaborne cargo, to “cut off the flow of cash which finances the mass murder of innocent people.” The new EU sanctions limit, but do not fully remove, European companies’ ability to insure seaborne oil shipments from Russia.

In August, the International Energy Agency said there had been fewer declines in Russian fuel shipments “than previously forecast.” Though sales to European markets have declined sharply, much Russian oil is rerouted, rather than off the market altogether. Says Dr. Adnan Vantsever, Reader in Russian politics at the Russia Institute, King’s College London, Russia “has a massive surplus capacity in terms of its export infrastructure and so rerouting the oil for Russia is not really a difficult task.” He adds that if Russia continues to export large amounts of oil, but earns much less per shipment than it did previously, the sanctions will have had their desired effect.

Dock workers in the UK, Sweden, and the Netherlands have refused to unload Russian oil in recent months. But the companies that own and insure the ships bringing oil out of Russia say that while such trade is still legal, there is little they can do to stop their clients from taking on cargo in Russian ports.