In a move likely to catch the eye of marine insurers, Britain has imposed new sanctions on 44 tankers linked to the Russian shadow fleet, as well as Russia’s two largest oil companies, Lukoil and Rosneft, in an effort to increase pressure on Russian energy revenues.
The sanctions include asset freezes, director disqualification, transport restrictions, and a ban on British trust services for both companies, according to a report from Reuters.
The UK government said that Lukoil and Rosneft are strategically significant to the Russian state, contributing to revenues that support the war in Ukraine.
“We are introducing targeted sanctions against the two biggest oil companies in Russia, Lukoil and Rosneft,” said finance minister Rachel Reeves during a visit to the United States.
Reeves also indicated that Britain is increasing pressure on companies in third countries, including India and China, that facilitate the movement of Russian oil to global markets.
The new sanctions target 51 ships, including 44 from the shadow fleet, as well as individuals and entities in the energy and defence sectors. The measures also include seven liquefied natural gas tankers and the Chinese Beihai LNG terminal, which has been importing cargoes from the sanctioned Russian Arctic LNG2 facility.
Nayara, a Russian-owned refinery in Mumbai, India, was also sanctioned. Nayara’s largest shareholder is Rosneft, and the company is already subject to EU sanctions. Nayara has condemned the EU measures.
Chinese refiner Shandong Yulong Petrochemical and several port operators in Shandong province – Shandong Jingang Port, Shandong Baogang International, and Shandong Haixin Port – were also designated.
China’s foreign ministry responded by expressing opposition to unilateral sanctions not authorised by the United Nations Security Council and lodged a protest with the UK. Spokesperson Lin Jian said China has called for peace talks on Ukraine and that normal exchanges between Chinese and Russian firms should not be disrupted.
Yulong Petrochemical, a joint venture between Nanshan Group and Shandong Energy Group, is one of China’s largest buyers of Russian oil by refinery capacity, processing up to 400,000 barrels per day.
Russia’s embassy in London said that the sanctions would destabilise global energy markets and increase costs for British businesses and consumers.
“Contrary to the loud assurances of British leaders, these restrictions will not have any impact on the Russian foreign policy course,” the embassy said.
Reeves has said that there is “no place for Russia in global markets” and that the UK would take all necessary steps to prevent Moscow from funding its war in Ukraine.
Rosneft is Russia’s leading oil producer, accounting for approximately 40% of national output, while Lukoil is the second-largest, with significant foreign exposure.
The new sanctions are part of a broader international effort, with the EU and US also targeting similar entities to restrict Russia’s energy revenues. The UK and Canada have recently announced plans to join the EU initiative to use frozen Russian assets to support Ukraine’s reconstruction, with discussions ongoing about the legal and financial mechanisms for tapping these assets.
The shadow fleet of tankers, used to transport Russian oil outside of Western oversight, has grown rapidly since the imposition of sanctions, with estimates now exceeding 1,500 vessels.
Traders familiar with Russian oil sales said the new measures would reduce the availability of ships and insurance for Russian oil, as some shipments to Asia are still transported and insured by British-based companies. This is expected to push more Russian oil trade towards the shadow fleet, which relies on non-Western insurance and services.
The shadow fleet, a network of older tankers, has become a frequent target of sanctions by the UK, US, and EU since Russia’s invasion of Ukraine in February 2022. Officials say these vessels are used to circumvent sanctions on Russian oil. Some Chinese and Indian ports have previously refused to unload cargoes from the shadow fleet, complicating Russian oil sales.
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