UK Targets Russian Oil With Sanctions on ‘2Rivers’ Network

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(Bloomberg) — The UK government announced new sanctions on Russia’s so-called shadow oil fleet as it ramped up efforts to squeeze energy revenues funding the Kremlin’s war in Ukraine.

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Britain targeted 175 companies in the 2Rivers network, according to a statement from the foreign office on Tuesday which coincided with the fourth anniversary of Russia’s full-scale invasion. It also sanctioned PJSC Transneft, one of world’s largest oil pipeline companies,  which it said was responsible for transporting over 80% of Russia’s oil exports. 

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“The UK has today taken decisive action to disrupt the critical financing, military equipment and revenue streams that sustain Russia’s aggression,” Foreign Secretary Yvette Cooper said in a statement, describing the package as “our largest raft of measures since the early months of the invasion.”

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Bloomberg in October reported on how the 2Rivers network, linked to Azeri traders Etibar Eyyub and Tahir Garayev, has been instrumental in keeping hundreds of millions of barrels of Russian crude flowing despite international sanctions imposed in response to the war. 

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The network of offshore companies, previously known as Coral, rapidly grew in stature before sanctions imposed by the European Union and UK since 2024 damaged its ability to operate. At the time, Garayev’s lawyers denied that he has any relationship with Rosneft or Eyyub and said he had not been involved in any petroleum-related activities since late 2022. Representatives for Eyyub’s companies didn’t respond to a request for comment 

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The sanctions have had the effect of increasing the cost of each trade and causing Western banks, insurers and professional services firms to largely avoid them so they themselves don’t also come under the eye of the authorities, according to people with direct knowledge of the operations.

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It’s forced the network to pay higher insurance premiums, accept longer and more opaque shipping routes, and reduce its price per barrel as brokers, refiners, storage operators and ports either refused to trade with them entirely or raised costs to protect themselves, the people said.

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The foreign office said international sanctions had deprived Russia of some $450 billion of revenue, the equivalent of two more years of funding for its war.

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