The UK imposes sanctions on Russian companies Lukoil and Rosneft

On Wednesday, the UK imposed measures against Russia’s two largest oil companies, Lukoil and Rosneft, and against 51 tankers in the so-called “shadow fleet,” which it says is a new attempt to tighten energy sanctions and stifle the Kremlin’s revenues.

Lukoil and Rosneft were subject to British sanctions against Russia because of their role in supporting the Russian government, which, according to the government, means their role. As a result, they are subject to measures such as asset freezes, disqualification of directors, transport restrictions, and a ban on British fiduciary services.

The British government said the companies were strategically important to the Kremlin and added that their activities were of economic importance to Russia as they contributed to the country’s revenues, which helped it maintain the war in Ukraine.

“We are imposing targeted sanctions on Russia’s two largest oil companies, Lukoil and Rosneft,” British Finance Minister Rachel Reeves told reporters during a visit to the US.

“At the same time, we are increasing pressure on companies in third countries, including India and China, which continue to facilitate the placement of Russian oil on world markets,” she added.

The Russian Embassy in London said that the sanctions would have the opposite effect, as they would destabilize global energy markets and increase costs for British businesses and consumers.

“Contrary to the loud assurances of British leaders, these restrictions will not affect the course of Russian foreign policy,” the embassy said in a statement.

Reeves said that “there is no place for Russia in global markets” and that the UK would take all necessary measures to prevent Moscow from financing the war in Ukraine.

Rosneft is Russia’s leading oil producer, accounting for about 40 percent of the country’s total production, while Lukoil is the second largest but most exposed to competitors abroad.

The new sanctions also targeted 51 ships, including 44 in the so-called shadow fleet, as well as individuals and entities in various sectors, including energy and defense.

The latest sanctions also include seven liquefied natural gas tankers and the Chinese Beihai LNG terminal, which imported cargo from the sanctioned Russian Arctic LNG2 plant, the UK said.

Among the sanctioned companies is Nayara, a Russian refinery based in Mumbai, India.

The refinery, whose largest shareholder is Rosneft and which has already been sanctioned by the European Union, is struggling to survive.

The UK’s new measures will reduce Russia’s access to ships and ship insurance, as some Russian oil is still being transported and insured by UK-based companies on its way to Asia, said traders familiar with Russian oil sales.

This means that even more Russian oil trade will be diverted to the shadow fleet, which uses non-Western insurance and services, traders said.

The shadow fleet already has more than 1,500 ships, Western experts estimate, so there is no shortage of vessels to transport Russian oil.

However, several Chinese and Indian ports have already refused to accept cargo from shadow fleet tankers, making it even more difficult to sell Russian oil.

Since sanctions were imposed on Russia for its invasion of Ukraine in February 2022, the shadow fleet has increasingly been the target of sanctions by the UK, US, and EU.

It is a network of older tankers that officials say are being used to circumvent sanctions on Russian oil./,RSE/