LONDON: Britain has imposed sanctions on Russia’s two largest oil companies, Lukoil and Rosneft, alongside 51 shadow fleet tankers in a fresh effort to tighten energy restrictions and cut off Kremlin revenues.
The new measures aim to choke off state revenues that help sustain Russia’s war in Ukraine.
Lukoil and Rosneft were designated under Britain’s Russia sanctions laws for their role in supporting the Russian government.
Both companies are now subject to an asset freeze, director disqualification, transport restrictions, and a ban on British trust services.
The government described these firms as strategically significant to the Kremlin and of economic importance to Russia.
Britain’s finance minister Rachel Reeves announced the targeted sanctions against Russia’s biggest oil companies during a trip to the United States.
She stated that Britain is simultaneously increasing pressure on companies in third countries, including India and China, that continue facilitating Russian oil sales on global markets.
Russia’s embassy in London claimed the sanctions would backfire by destabilising global energy markets and raising costs for British businesses and consumers.
The embassy asserted that these restrictions would not impact Russia’s foreign policy course.
Reeves emphasised there is no place for Russia in global markets and that Britain will take all necessary steps to stop Moscow from funding its war.
Rosneft is Russia’s leading oil producer, accounting for approximately 40% of the country’s total oil output.
Lukoil ranks as Russia’s second-largest oil company with the largest foreign exposure among domestic peers.
Neither Rosneft nor Lukoil immediately responded to requests for comment about the sanctions.
The new sanctions also target 51 ships, including 44 within the so-called shadow fleet, plus individuals and entities across energy and defence sectors.
Britain’s latest measures include seven liquefied natural gas tankers and the Chinese Beihai LNG terminal, which has been importing cargoes from the sanctioned Russian Arctic LNG2 facility.
Nayara, a Russian-owned refinery based in Mumbai, India, was among the companies sanctioned.
The refiner, whose biggest shareholder is Rosneft and which already faces EU sanctions, is scrambling to sustain operations.
Nayara, which previously condemned the EU sanctions, did not immediately respond to a Reuters request for comment.
Traders familiar with Russian oil sales said Britain’s measures will reduce ship and insurance availability for Russian oil.
Some Russian oil volumes were still being transported and insured on routes to Asia by British-based companies.
The traders indicated more Russian oil trade would migrate toward the shadow fleet, which uses non-Western insurance and services.
Western experts estimate the shadow fleet already exceeds 1,500 ships, indicating no shortage of vessels to transport Russian oil.
Several Chinese and Indian ports have previously refused to unload tankers from the shadow fleet, further complicating Russian oil sales.
The shadow fleet has increasingly been targeted by sanctions from Britain, the US and the EU since Russia’s invasion of Ukraine in February 2022.
This network of older tankers is used by officials to avoid sanctions on Russian oil. – Reuters
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