THE message to Russia is clear: “No more shall you blackmail our member states. No more shall euros go into your war chest. Your gas will be banned. Your shadow fleet will be stopped,” thundered EU energy chief Dan Jørgensen.

Tough talk indeed.

The latest instalment of the Brussels sanctions soap opera was a clear attempt to grab attention amid falling ratings for the once compelling hit show.

But it is going to take more than a proposed phasing out of Russian LNG imports and some heavily caveated threats about stopping dark fleet vessels to win back a distracted and disengaged audience.

Targeting Russian LNG could, theoretically, have an impact, but the politics of getting this plan through in a meaningful way is slim. As for the enticing prospect of high seas interdictions, the small print reveals a plan to potentially get prior consent from dark fleet flag states. Best of luck with the mission to Gabon and once you have inked deals with the fake flags, please do let us know.

The imminent 17th serving of EU sanctions comes this time with moves against Vietnamese, Turkish and Serbian companies that it accuses of helping Russia evade embargoes, alongside another 149 oil tankers.

The problem here is that this approach is only amplifying the same basic flaw from previous episodes.

What has been done repeatedly is to deem a ship unacceptable or a commodity illegal in some circumstances. What has repeatedly not been done is to secure international agreement to recognise and enforce such designations.

That means the trade continues to flow, but further away from those who seek to control it.

A case of hope over experience, if you will.

To some extent the same is true in the US. While the Ofac approaches come with more bite and a bigger stick, the net effect is the same, in that trade continues to flow.

Donald Trump was clear; he said he could reduce Iranian flows to zero. But that is simply not true, and playing cat-and-mouse with the teapot refineries importing discounted Iranian crude is only shifting the issue, not stopping it.

So, have sanctions failed? Well, no.

While Trump may have blustered about maximum pressure and stopping flows, experts were anticipating at best a sizeable reduction, not a complete shut-out. A more sophisticated analysis would point to the increasing cost and disruption that these efforts are having on their targets.

There is a very real case to be made that the impact is real and it is providing both the US and EU with some leverage in their political aims.

But at some point a calculation will have to be made. At what point will have the screws been turned to the point that there are diminishing returns in adding yet another tranche of targeted designations?

Expanding lists is not without impact, but if stopping flows is your aim then other avenues of enforcement will be needed. Will Trump’s recent promise of secondary sanctions prove to be a case of rhetoric over reality? Will the EU deliver a Russian gas ban this side of 2030? All things are possible, but in the meantime we await the 18th, 19th and 20th packages with the distinct feeling that we have watched this episode already.

Richard Meade
Editor-in-chief, Lloyd’s List

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