EU seeks ship boarding rights to crack down on Russia’s shadow fleet
The European Union is pursuing pre-boarding agreements with flag states that register vessels to legally search ships suspected of transporting Russian oil in violation of sanctions, as part of an intensified campaign against Moscow’s shadow fleet that EU officials say has already cut Russian oil revenues to their lowest levels since the Ukraine war began.
EU High Representative Kaja Kallas told reporters following a Foreign Affairs Council meeting that the bloc has sanctioned over 550 ships and conducted extensive diplomatic talks with flag states. ‘This is a legal way for one party to board and search a vessel of another country,’ she said.
Kallas added that going after Russia’s shadow fleet remains a priority. ‘Slowing down the shadow fleet costs Russia revenues. This is why we will work on more sanctions on the shadow fleet, both vessels as well as enablers.’
She said the Head of the European Intelligence Centre had briefed ministers on the impact of sanctions, showing that exports of Russian crude oil are at their lowest in months and Russian tax revenues from oil are at their lowest levels since the war started. ‘Sanctions are hitting Russia hard, and more are coming,’ she forewarned.
The push comes as last month’s US sanctions on Russian oil giants Rosneft and Lukoil have prompted Chinese and Indian businesses to move away from Russian oil, a US Treasury official said. The official, speaking on condition of anonymity, said early signs of the restrictions’ effects are encouraging.
‘What we’re seeing is actually a lot of Chinese refineries, Indian refineries, and Indian and Chinese banks are conscious of these sanctions, are risk averse, and do recognise the importance of the relationships with the West and are moving to comply,’ the official said.
The average price per barrel for Russian oil exports has dropped about 21% since 1 October, the official said. India and China have made up a large portion of Russian energy purchases since Russia invaded Ukraine in 2022.
As the European Union works on its 20th package of sanctions against Russia, Kallas said the bloc is moving toward a more agile approach to sanctions, rather than concentrating only on approving large packages of restrictions each time.
She said ministers also discussed the EU’s proposed reparations loan for Ukraine using frozen Russian assets as collateral. Around €300 billion, about $345 billion, in Russian sovereign assets remain immobilised in Europe and allied jurisdictions.
Belgium, home to Euroclear which holds the bulk of frozen Russian reserves, has resisted proposals to seize the funds, insisting that any legal and financial risks from such a move must be shared across the EU.
The interest, or ‘windfall profits’, generated from Russia’s frozen sovereign assets has been directed to Ukraine, while the principal funds remain untouched. Besides Euroclear, smaller amounts are held in other European and G7 financial institutions. The EU agreed in 2024 to channel the profits to Kyiv for military aid and reconstruction, while continuing to debate whether the underlying reserves can ever be seized.
This week, Russian State Duma Chairman Vyacheslav Volodin instructed the government to prepare an appeal outlining retaliatory measures in the event Europe confiscates frozen Russian assets, calling those who support the move ‘thieves and crooks’.
European Commission President Ursula von der Leyen said in September that ‘This is Russia’s war, and the perpetrator must pay for it,” adding that “the assets themselves will not be touched. And the risk will have to be carried collectively. Ukraine will only pay back the loan once Russia pays reparations’.
