Russian Oil Sector Under Siege as EU Ramps up Pressure and India Winds Down Imports
•February 9, 2026
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Why It Matters
The policy shift tightens economic pressure on Russia and redirects crude flows, creating both regulatory risk for the shipping sector and new market opportunities for tanker operators.
Key Takeaways
- •EU proposes full maritime services ban on Russian crude
- •Ban could force Russia into uninsured shadow fleet
- •India will cease Russian oil imports under US deal
- •Shift boosts VLCC and Suezmax demand for Indian imports
- •Increased shadow fleet risk raises pollution concerns
Pulse Analysis
The EU’s pivot from a price‑cap mechanism to a full maritime services embargo reflects a strategic escalation in sanctions aimed at choking Russian oil revenues. By denying access to essential services such as hull maintenance, machinery support, and mutual insurance, the bloc hopes to make Russian crude less marketable. However, the move may inadvertently expand the shadow fleet—a network of older, often uninsured vessels that operate outside formal regulations—heightening the probability of spills in congested waterways like the English Channel and the Baltic Sea.
India’s decision to end Russian oil purchases under the newly inked US‑India trade pact reshapes the global supply‑demand equation. With tariffs on US‑bound Indian exports slashed from 50% to 18%, India is poised to source more crude from the Middle East, the United States and even Venezuela, as recent deals suggest. This shift will increase demand for large tankers, particularly VLCCs and Suezmaxes, boosting tonne‑mile volumes and offering a revenue lift for owners who can secure long‑term contracts. Meanwhile, Russia faces a shrinking pool of reliable buyers, forcing it to rely on less‑scrutinized carriers.
The convergence of stricter EU sanctions and India’s realignment amplifies both commercial and environmental stakes. Shipping firms must navigate a fragmented regulatory landscape, balancing compliance with the lure of higher freight rates from redirected flows. At the same time, the growing reliance on substandard vessels raises the specter of catastrophic oil pollution, a risk that insurers and port authorities are ill‑prepared to absorb. Coordinated policy action among sanctioning nations could mitigate these hazards, while savvy operators who adapt to the new trade patterns stand to capture significant market share in the evolving oil logistics arena.
Russian oil sector under siege as EU ramps up pressure and India winds down imports
The European Union (EU) has revealed plans to replace its Russian oil price cap with a full ban on maritime services, while India’s trade deal with the US will involve it stopping crude imports from Russia.
The EU’s plans, announced on Friday, still have to be approved by member states but if they get the go-ahead, the crude oil price cap, currently at $44.10 per barrel, will be replaced by a full ban on Russia’s access to maritime services including hull and machinery and mutual insurance. Although this is intended primarily to restrict Russian crude export volumes, there could be collateral damage by increasing Russian dependence on the substandard shadow fleet, much of which is uninsured.
This, in turn, increases the risk of a catastrophic incident involving heavy pollution from a shadow fleet tanker potentially in sensitive waters including the English Channel, the North Sea, the Baltic Sea and the Black Sea. Such an incident would not be covered by the International Group of P&I Clubs’ which provides up to $1bn of oil pollution‑related cover.
Related: Dynacom orders nine suezmaxes at Hengli
Announcing the change in strategy from price cap to maritime services, European Commission President Ursula von der Leyen said: “On energy, we introduce a full maritime services ban for Russian crude oil. It will slash further Russia’s energy revenues and make it more difficult to find buyers for its oil.”
Although Von der Leyen referred to working alongside ‘like‑minded partners’, it is not clear whether the US will support the move. It has previously declined to reduce the level of the crude price cap in line with the EU. However, observers stressed the need for a coordinated approach so that tanker owners could rely on the same regulations across sanctioning states.
Meanwhile, the US‑India trade deal, announced earlier this month, will require India to stop importing Soviet crude in exchange for the US reducing tariffs on the country’s exports from 50% to 18%. Analysts point out that India can buy crude elsewhere, notably the Middle East, just as it used to before Russian oil became available more cheaply.
According to New York broker Poten & Partners, India bought more than 60% of its crude oil from suppliers in the Middle East prior to 2022. They included Saudi Arabia, Iraq, the UAE, and Kuwait as well as other suppliers in West Africa, the US, and Brazil.
In its latest report, Poten suggests that the US‑India trade deal could involve more crude from the US and also, in a recent deal between India’s Reliance Industries and Vitol, two million barrels of Venezuelan crude for April delivery. India is relatively well‑placed to find alternative sources of crude, but Russia will struggle to find takers for its spare capacity.
Related: AET orders first hybrid‑electric dynamic positioning shuttle tanker
Tanker owners may benefit from the latest political machinations. India will buy more oil on trades suited to VLCCs and Suezmaxes, Poten suggests. Increased volumes from the US and Venezuela will also boost tonne‑mile demand for big ships.
Whether Russia will succeed in finding enough dark fleet tankers to ship the displaced Indian oil remains to be seen. But the risks of a substandard tanker catastrophe are climbing all the time … in line with those of geopolitics.
About the Author
Correspondent
UK‑based Paul Bartlett is a maritime journalist and consultant with over four decades of experience in international shipping, including ship leasing, project finance and financial due diligence procedures.
Paul is a former Editor of Seatrade magazine, which later became Seatrade Maritime Review, and has contributed to a range of Seatrade publications over the years including Seatrade’s Green Guide, a publication investigating early developments in maritime sustainability initiatives, and Middle East Workboats and Offshore Marine, focusing on the vibrant market for such vessels across that region.
In 2002, Paul set up PB Marine Consulting Ltd and has worked on a variety of consultancy projects during the last two decades. He has also contributed regular articles on the maritime sector for a range of shipping publications and online services in Europe, Asia, and the US.
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