Russia May Be Circumventing Oil Restrictions via Egypt, Report Says

Through moving cargo from one vessel to another while in transit to its final destination, Russia may be skirting sanctions on its energy imposed by the West over its invasion of Ukraine, according to a Bloomberg report

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Russian Foreign Minister Sergei Lavrov and his Egyptian counterpart Sameh Shokry last month.
Russian Foreign Minister Sergei Lavrov and his Egyptian counterpart Sameh Shokry last month.Credit: AFP

Russia may be circumventing Western restrictions on its crude oil exports by transshipping through Egypt in response to increasingly strict sanctions in the wake of its invasion of Ukraine in February.

Around 700,000 barrels were delivered to the El Hamra oil terminal in Egypt last week and may have been mixed in with other cargo leaving the port, making “the cargo’s ultimate destination harder to track,” Bloomberg reported on Wednesday, noting that such an approach created “possibilities to blend Russian crude with Egyptian barrels.”

The report added that Russian tankers have also transferred barrels between ships off the North African coast as well as in the Atlantic ocean and not far from Singapore.

On June 2, the European Union gave its final approval to new sanctions on Russian oil and top bank Sberbank, after much wrangling with Hungary, as punishment for Russian President Vladimir Putin's Feb. 24 invasion of Ukraine.

EU leaders, used to plentiful supplies of Russian energy, agreed to an embargo on crude oil imports that will take full effect by end-2022. Hungary and two other landlocked Central European states secured exemptions for the pipeline imports they rely on.

On the same day that the Russian oil arrived in Egypt, Sergey Lavrov, Russia’s top diplomat, was in Cairo for talks Sunday with Egyptian officials as his country seeks to break the diplomatic isolation and sanctions by the West.

In a joint news conference with his Egyptian counterpart Sameh Shukry, Lavrov said he discussed Russia’s “military operation” in Ukraine with Egyptian officials who urged for “a political and diplomatic” settlement to the conflict.

Lavrov laid the blame on Ukraine for the rupture of earlier peace talks.

“We do not have any prejudices about resuming negotiations on a wider range of issues, but the matter does not depend on us,” he said. “Ukrainian authorities, from the president to his innumerable advisers, constantly say that there will be no negotiations until Ukraine defeats Russia on the battlefield.”

Russia’s war in Ukraine has had dire effects on the world economy, driving up oil and gas prices to unprecedented levels. Moscow has used its role as a major fuel supplier as a weapon, with Russian gas producer Gazprom announcing on Saturday that it had stopped sending gas to Latvia after accusing it of violating supply conditions, a move the Baltic country said would have little impact on its gas supplies.

Russia has already cut off gas supplies to Poland, Bulgaria, Finland, Netherlands and Denmark, which refused to pay for gas in line with an order by President Vladimir Putin requiring rouble accounts to be set up in a Russian bank.

Russia recently significantly cut the amount of gas it supplies to Europe via the Nord Stream 1 pipeline, citing problems with a gas turbine which underwent maintenance in Canada. The European Union disputes arguments by Russia and Gazprom that turbine issues are to blame for the sharp drop in supply through the pipeline that links Russia to Germany under the Baltic Sea.

The shortfall has raised the risk of shortages and gas rationing in Europe this winter.

Reuters and the Associated Press contributed to this report.

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