EU sanctions tweak to unblock Russian oil deals with third countries

Russian state-owned companies Rosneft and Gazprom will be able to ship oil to third countries under an adjustment of European Union sanctions agreed by member states this week aimed at limiting the risks to global energy security.

Major trading houses such as Vitol, Glencore and Trafigura as well as oil majors such as Shell and Total have stopped trading Russian oil for third parties, citing EU sanctions, including restrictions on insurance.

Purchases of Russian seaborne crude oil by EU companies and its export to third countries is allowed, but under tweaks to sanctions on Russia that came into force on Friday payments related to such shipments would not be banned.

“With a view to avoid any potential negative consequences for food and energy security around the world, the EU decided to extend the exemption from the prohibition to engage in transactions with certain state-owned entities as regards transactions for agricultural products and the transport of oil to third countries,” the EU said in a statement on Thursday.

Trading house sources had said EU restrictions would have led to China and India buying oil via smaller private traders and Russian oil trade migrating into grey areas with weak insurance against accidents and being handled by older ships.