UK sanctions Lukoil-linked trader, 135 shadow fleet tankers

The UK has sanctioned a Lukoil-linked trading house in the UAE and 135 oil tankers in its latest clampdown on shadow fleet operations, the government said on July 21, highlighting its efforts in undermining Russia's war chest against Ukraine.

The announcement came after the UK and EU lowered the price cap for maritime service firms to transport Russian crude from $60/b to $47.6/b on July 18, with the new threshold due to take effect in early September.

Shadow fleet tankers refer to the ships used to transport Russian oil in circumvention of the price cap as well as sanctioned oil from Iran and Venezuela, with an earlier study by S&P Global Commodity Insights and Market Intelligence suggesting the number of such vessels reached 940 as of May.

The UK government said Litasco Middle East DMCC -- linked to Lukoil, Russia's largest private oil producer -- was blacklisted "for its ongoing role in moving large volumes of Russian oil on shadow fleet vessels."

Lukoil did not immediately respond to an email seeking comments.

The UAE-based affiliate was expanding its operations in Dubai as more Russian products and crude oil were being diverted from Europe to Asia following Russia's invasion of Ukraine in February 2022.

Separately, 135 oil tankers were sanctioned in the UK's latest enforcement action and the government said they had transported $24 billion worth of cargo illicitly since the start of 2024.

The ships have lifted 486,000 b/d of crude and oil products from Russian ports so far this year, according to S&P Global Commodities at Sea.

In addition, the UK sanctioned Intershipping Services for its alleged role in registering shadow fleet vessels under the banner of the Gabonese flag and said those ships transported up to $10 billion/year worth of goods on behalf of the Russian state.

The EU recently sanctioned the same company for flagging shadow fleet ships under Gabon and said it also flagged such vessels under the flag of Comoros via affiliated interests.

"New sanctions will further dismantle Putin's shadow fleet and drain Russia's war chest of its critical oil revenues," UK Foreign Secretary David Lammy said in a statement.