Denmark could block Russian oil tankers from reaching markets

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Denmark will be given the task of inspecting and potentially blocking tankers of Russian oil sailing through its waters under new EU plans, as western powers scramble to enforce a price cap the Kremlin has learned to avoid.

According to three people with knowledge of talks in Brussels, Denmark would target tankers transiting the Danish straits without western insurance, under laws permitting states to check vessels they fear pose environmental threats.

All of Russia’s oil shipped through the Baltic Sea, roughly 60 per cent of its total seaborne oil exports, crosses the narrow Danish straits on its way to international markets.

The proposal comes as western officials admit that “almost none” of Russian crude exports were sold below the $60-a-barrel cap last month, 11 months after the G7 group of developed nations imposed the measure in response to Moscow’s full-scale invasion of Ukraine.

Oil revenues are a critical plank of President Vladimir Putin’s war machine. Russian crude earnings this year have boosted his ability to fund his armed forces at a time when Ukraine is increasingly concerned about the longevity of its own financial support from the west.

The G7 cap demands western ship insurers only provide cover to Russian shipments where the oil has been sold for less than $60 a barrel. But a growing number of tankers carrying Russian crude is suspected of sailing with falsified financial statements or non-western insurance.

The EU is concerned that non-western insurance policies may not be effective in the event of an oil spill.

The volume of Russian oil transiting the Danish straits every day is the equivalent of about 2mn barrels of crude, or three Aframax vessels — a common ship used for Russian exports.

“The key is enforcing the insurance regulations,” said one of the officials, who declined to be identified as the talks are private. “It’s being done very patchily at the moment . . . littoral states have the right to see proof.”

Officials say that demanding proper insurance from reputable firms is justified given that many Russian oil shipments are being carried out on so-called “shadow fleets” of old vessels, which have a higher chance of breakdown or spillage, risking a major environmental disaster.

The UN Convention on the Law of the Sea, which governs maritime traffic, includes clauses that allow states to “institute proceedings, including detention of the vessel” given “clear objective evidence” that the vessel poses a major threat of coastal damage.

But officials briefed on the proposal say it relies on the capacity of Denmark’s naval authorities to stop and check the tankers, and raises the question of what Copenhagen would do if a ship refused to stop.

“Discussions appear to be centred on making life more complicated for Russia and the buyers of its oil,” said Henning Gloystein at Eurasia Group. “If you can make the bureaucracy and risk associated with trading Russian oil a lot more onerous the expectation is buyers will start to demand larger discounts again for their trouble.”

A spokesman for the Danish defence command told the Financial Times: “In short, we don’t check paperwork or ships passing or sailing through the straits, unless it has to do with safety at sea.” The Danish government declined to comment.

The European Commission declined to comment on the proposed measures, but noted that its president, Ursula von der Leyen, had pledged to adopt further “actions to tighten the oil price cap”.

The cap was introduced as a means to reduce Russia’s earnings from its most valuable export without restricting crude supplies to non-western countries, due to fears that a full embargo would have created major problems for the global oil market.

Other measures are being considered by the EU as part of a new package of sanctions due to be formally discussed by member states this week. They include targeting shipping companies that sell their old ships to Russia’s “shadow fleets”, and countries that allow these ships to fly their national flag.

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