- According to the Washington Post, Russia is using decade-old oil tankers without sufficient insurance to avoid Western sanctions.
- Old ships pose a risk to the environment and ship crews as they navigate through shallow and icy waters.
- EU and G7 countries have hit Russia with sanctions that deny national insurance coverage if its oil does not trade at or below the price ceiling.
According to the Washington Post, Russia is using decades-old tankers to transport its oil and gas abroad, a dangerous move to avoid Western sanctions.
Aged ships that would otherwise end up in a landfill risk disaster or oil spills, and even their engines can fail at sea.
This has raised concerns among countries along the Baltic Sea, which is the northern route for Russian oil supplies, because the water is shallow and icy and crews have little experience.
This has prompted Finnish authorities to step up emergency drills in the event of an oil spill or environmental disaster, Mikko Hirvi, Deputy District Chief of the Finnish Coast Guard, told The Post.
“When we see new vessels that haven’t worked here before, we really don’t know how competent the crew is in ice navigation skills,” Hirvey said. “There are potential risks, and they are higher than before,” he added.
The European Union and the G7 countries have imposed tough sanctions on oil and gas exports from Russia following its invasion of Ukraine, including import bans and price caps.
Under capping rules, buyers of Russian oil can only access European shipping and insurance services if they bought it at $60 a barrel or less. The measure is intended to limit Moscow’s ability to fund a war against Ukraine while keeping Russian oil supplies to world markets to prevent shortages.
A large number of tankers carrying Russian oil on older ships appear to be uninsured, meaning they may not have the resources to clean up oil spills, according to The Post.
These Russian actions are indicative of attempts to soften the effects of Western sanctions. But that doesn’t seem to be working, given that the penalties have hit the country’s export earnings.
In February, Russia’s oil and gas export revenues halved. This is despite the fact that Moscow sells huge amounts of oil to buyers in Asia, including China and India. According to Bloomberg, Russia has even overtaken Saudi Arabia as China’s largest oil supplier.