Greek-owned oil tankers are likely to continue to carry Russian oil exports, despite the passage of a new eighteenth sanctions package last week that largely targets Russia’s oil exports.

The main sanction in the new package introduces a floating rate oil price sanctions cap of 15% below market rates for the Urals blend, Russia’s main export product oil. Previously, the cap was a fixed $60, but after prices fell to that level it became legal for EU registered tankers to work for Russian oil companies, transporting their oil. Currently the cap is at around $47.60 per barrel.

Greek companies have been particularly active regarding Russia’s oil exports. While many of the tankers in the so-called shadow fleet are Russian-owned and operated tankers, well past their useful life, fully a fifth of the fleet are Greek-owned and EU certified modern tankers, facilitating the Kremlin by carrying its oil around the world.

The problem the EU hopes to solve with the new floating rate is to make it impossible for Greek work for Russia at the new lower cut off. The EU can’t sanction the Greek ships directly as they also work for other countries in the legitimate oil trade. Removing the Greek ships from service would disrupt the international oil trade and lead to price spikes and instability in supplies.

Greeks tankers to try and work around sanctions

Despite the new lower oil price cap, Greek shippers say they expect to continue their lucrative work for Russia, which pays a handsome premium to market rate, although it will become “more complicated,” Reuters reported on July 18, citing industry sources.

Greek-owned vessels – part of the world’s largest tanker fleet – are expected to remain active in the trade, which constitutes an estimated 20% of Russia’s seaborne oil exports, according to the unnamed sources.

“As long as traders keep buying oil at that price, things won’t change much, we’ll respect the new cap,” one source from a Greek shipping company told Reuters. Another said that while the new measures would introduce further complications, transactions remained “doable.”

Officials from Greece’s Ministry of Shipping and Island Policy did not respond to a request for comment.

The European price cap regime, however, may have limited enforcement power without corresponding action by the United States, given that most international oil transactions are conducted in dollars. Washington has so far not signalled any move to align with the EU’s revised cap. Indeed, when Brussels originally proposed to cut the cap to a fixed $50 then $45 earlier this summer, the Trump administration refused to support the move. Eventually, Brussels decided to go ahead with the floating rate cap on its own and hope the White House would support the move as a fait accompli.

“Similar to the previous requirements, they will need to comply with the new EU price cap and ensure that they are comfortable that they are only trading in price cap-compliant products,” Leigh Hansson, sanctions partner at international law firm Reed Smith told Reuters.

Hansson added that companies could expect a 90-day wind-down period for the transport, and related services, of Russian crude oil for contracts concluded by July 18.

Ukraine started to target Greek tankers

Ukraine was linked to explosions on three Greek tankers last week, part of a string of mysterious explosions this year. The incidents comes as Ukraine starts to take its fight with Russia outside of its own borders despite orders from the US not to attack Russian oil refineries or pipelines inside Russia for fear of provoking a pan-regional war.

Most notably, the explosions that destroyed the Nord Stream gas pipelines in September 2022, have since been linked to independent Ukrainian partisans acting on their own, although it was reported that former commander-in-chief General Valerii Zaluzhnyi was informed of the attack before it happened.

It now appears that Bankova (Ukraine’s equivalent of the Kremlin) has also decided to take direct action against Russia’s partners, including the Greeks, that make up part of the shadow fleet.

There has been a string of what appear to be special operation attacks in the last month. At the start of July Russia's transportation ministry was investigating a blast on the Eco Wizard tanker at the Ust-Luga port near St Petersburg in the Baltic Sea, which had caused an ammonia leak on board.

A week later a blast caused flooding in the engine room of the Greek-owned Vilamoura off the coast of Libya shortly after it visited Ust-Luga in early April. Ukraine said that the ship was part of Russia's "shadow fleet" used to evade oil sanctions.

Four other mysterious limpet mine attacks hit vessels that had called at Russian ports this year since January, three of which happened in the Mediterranean, according to analysis by Lloyd's List. The Seacharm, hit in January off Turkey, and the Seajewel, hit in February in Italy, both belong to Thenamaris, a company controlled by Greek shipping magnate Nikolas Martinos.

The Grace Ferrum, damaged off Libya in February, belongs to the Cypriot firm Cymare. Another vessel, the Koala, was damaged in an explosion at Ust-Luga Port in February and had been sanctioned by the European Union in May for transporting Russian oil.

The blasts on oil tankers linked to Russia have shaken the shipping world and prompted speculation that they were part of a state-backed sabotage campaign, Newsweek reports. Shipowners have now begun checking their ships' hulls for mines after visiting Russian ports.