Greece and Malta Hesitate Over EU’s Russia Oil Services Ban

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(Bloomberg) — Greece and Malta have emerged as the main obstacle to a European Union proposal to replace a Russian oil price cap with a ban on the services needed to ship the fuel. 

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The two southern European countries raised concerns about the move at an EU ambassadors’ meeting on Monday where the bloc’s latest sanctions package was presented, according to people familiar with the matter. 

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They expressed fears that the switch may affect Europe’s shipping industry and energy prices, said the people, who spoke on condition of anonymity to discuss private deliberations.

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Both nations also asked for clarifications on proposals to sanction foreign ports for handling Russian oil and to tighten ship seller oversight to cut down on vessels ending up in Moscow’s fleet, the people added.

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A Greek government spokesperson declined to comment. The Maltese government did not immediately respond to a request for comment. 

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Last week, the European Commission, the EU’s executive arm, proposed replacing an existing price cap on Russian oil sales with a ban on the services needed to move the oil. 

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The proposal, which would hit insurance and transport providers, reflects the price cap’s struggles to severely curtail Moscow’s oil revenue. It’s the centerpiece of the EU’s 20th sanctions package targeting Moscow for its full-scale invasion of Ukraine, which is entering its fifth year. 

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The measure would be conditional on the backing of the Group of Seven nations, which collectively implemented the price cap at the end of 2022.

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The US position on the change is unclear, said the people. The EU had previously adopted a ban on many services before the price cap was introduced.

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Elsewhere, the EU is considering lifting sanctions on two Chinese banks after having received commitments from Beijing over its support for Russia’s war against Ukraine, the people said.

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The commission did not immediately reply to a request for comment. 

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The EU sanctioned the two banks, Heihe Rural Commercial Bank and Heilongjiang Suifenhe Rural Commercial Bank, last August. The move prompted Beijing to target two small banks in the EU.

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China remains Russia’s main war-time enabler, some of the people said, providing Moscow with the bulk of the critical supplies it needs to make weapons.

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The EU’s latest package does include proposals to sanction several companies in China and elsewhere that are allegedly supplying Russia’s war machine with key components. It also targets cryptocurrency operators and a small number of banks in Central Asia and Laos that it claims are helping Moscow evade the bloc’s sanctions.

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Additionally, the EU has proposed applying its anti-circumvention tool for the first time, which would see machine tools and certain radio equipment banned from being exported to Kyrgyzstan. But Germany is concerned that could impact bilateral relations with the country, said the people. One alternative is to introduce quotas based on pre-war trade data instead of a full ban, the people added.