Article

EU aims to exempt Pilot Services from Russia Oil Ban


by Bloomberg, Europe - published on 4 October 2022 167 -

News from Bloomberg - Europe on 02.10.2022:

The European Union proposed making so-called pilot services exempt from sanctions targeting the transfer of Russian oil that are set to kick in this year to punish Moscow for its invasion of Ukraine.

The exception, which would allow shipowners to hire specialist pilots needed to guide vessels through narrow choke points, was proposed to bolster maritime safety, according to a person familiar with the plans, who asked not to be identified because negotiations on the sanctions are ongoing.

Under the EU’s current sanctions, which take effect from December, pilot services would be included in a ban on providing technical assistance needed to transport oil. One of the affected areas would be the Danish Straits, which are unavoidable for shipments of crude and fuel from Russia’s Baltic Sea ports.

The new proposal is part of the European Commission’s eighth sanctions package, which was unveiled last week in response to Russian moves to annex four occupied territories in Ukraine. The latest draft of the restrictive measures will be discussed by EU ambassadors in Brussels on Monday.

Services, Insurance Ban

The use of pilot services to guide vessels transporting oil through what are often treacherous waters is highly recommended by Denmark’s maritime authorities due to the safety and environmental risks. Almost 2 billion barrels passed through them to reach global markets over the past two years, according to data compiled by Bloomberg.

In June, the EU announced a ban on providing services and insurance for shipments of Russian oil cargoes anywhere in the world, as well as an embargo on most seaborne imports into the bloc. The measures are due to come into force in December for crude and next year for fuels. Most pipeline deliveries are exempt from the embargo.

As part of the bloc’s sanctions discussions, member states are discussing allowing shipments to third countries around the world and the provision of those required services as long as the Russian oil has been sold below an agreed price. The price cap would be implemented in coordination with the Group of Seven nations.
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