EU Floats Sanctions on Lukoil Dubai Unit for Shadow Fleet Link
(Bloomberg) -- The European Union is considering imposing sanctions on Litasco Middle East DMCC, a Dubai-based trading unit of Russian oil giant Lukoil PJSC, as part of sweeping new measures targeting Moscow’s covert fleet of tankers.
The move, floated in documents seen by Bloomberg, would be the first time Western governments have sought to sanction a Litasco entity since the invasion of Ukraine. Its parent company Lukoil was the second-largest seller of Russian crude to foreign markets last year.
The proposals need the backing of all member states and could change before they are adopted. They form part of the EU’s 17th package of sanctions on Moscow over its invasion of Ukraine, as the bloc seeks to crank up pressure on the Kremlin by hitting its energy revenues and ability to sustain the war against its neighbor.
Litasco Middle East is being targeted for allegedly enabling the growth of the so-called shadow fleet of ships that haul Russian oil supplies, according to the proposal. The buildup of old and unregulated tankers has led European capitals to call for more stringent sanctions on Moscow’s energy revenue in a bid to pressure President Vladimir Putin to end his war.
In total, the measures would target about 60 individuals and some 150 vessels, which would bring the number of EU-sanctioned ships to more than 300, Bloomberg reported earlier.
The list also includes VSK, a top-five Russian insurance provider that was blacklisted by British authorities last year, and Surgutneftegas PJSC, a company sanctioned by the Biden administration before leaving office earlier this year.
The latter was the third-largest Russian exporter of crude, accounting for almost 12% of last year’s sales to foreign markets, excluding former Soviet nations, according to Bloomberg calculations based on industry data.
Litasco as a whole has been rebuilding in recent months by hiring traders in various offices across the globe. The company faced an exodus of staff after Russia launched its invasion in 2022.
The designation of major Russian oil companies could have ramifications for the European shipowners that still carry the country’s supplies. Since crude prices have retreated near $60 a barrel, Greek owners have returned to hauling barrels for Moscow, something that could become harder if major exporting and trading companies are placed under restrictions.
Other proposed targets include individuals and entities involved in Russian disinformation and hacking operations, as well as several Chinese entities that have allegedly provided Russia with machine tools used by its military industry and manufacturers of drones and drone components that have been deployed against Ukraine. Beijing has repeatedly denied supporting Moscow’s military efforts.
The EU is aiming to adopt the package of sanctions later this month.
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