Don’t let Russia normalise maritime trade with occupied Ukraine
HERE’s the TL;DR take on Trump’s Ukraine plan: win-win for the US and Russia, lose-lose for everybody else.
A democratic country that has been subjected to two years of unprovoked and illegal invasion will be cajoled into handing over substantial slices of its territory, vindicating and rewarding Putin’s aggression.
It will then commit to buying $90bn-worth of American weaponry, commensurately boosting the bottom line of the military-industrial complex.
Zelensky will then send the bill to Europe’s Nato affiliates, many of them desperately cash strapped and already backed in to the socially divisive austerity corner in a bid to balance the books.
And in return for masterminding the most cynical dismemberment of a sovereign state since Munich 1938, Trump happily proclaims himself a shoo-in for the next Nobel Peace Prize.
Several stories in Lloyd’s List this week have examined the implications of this ongoing crisis for the maritime industries.
Russia’s confidence in the permanence of its illicit gains is such that it has resumed containerised exports from Sevastopol. Trade had previously been limited to agricultural commodities.
According to our data, Chinese boxship Heng Yang 9 (IMO: 1059979) has made four calls since June, spoofing its Automatic Identification System signal to do so.
At least some of the content in the boxes appears to have been manufactured in the industrialised Donbas region, which probably means that rail links have been restored.
Meanwhile, Mariupol and Berdiansk, which fell into the Kremlin’s clutches in 2022, were this week formally declared open to foreign shipping.
This is a clear attempt to present these ports as a part and parcel of the Russian Federation, and indeed, such are the facts on the ground. But legally and ethically speaking, this is not the case.
Given the relative diplomatic amity between Moscow and Beijing, there is nothing to stop Chinese operators from taking Sevastopol bookings, at least in terms of applicable domestic law.
But even so, their doing so contravenes an International Maritime Organization resolution from December 2023, which calls on member states to instruct ships flying their flags to give such calls a miss.
Theoretically, Sevastopol has been off limits to EU owners since the annexation of Crimea in 2014. This is a line that should be held, despite considerable evidence that a small number of operators have flouted the ban.
More broadly, shipping and marine insurance have been central to western sanctions efforts, the main instrument governments have used in their efforts to curtail Russia’s war chest.
It is to the credit of the maritime industries that we have very largely kept our end of the bargain. If compliance has not been 100% absolute, it has not been far off it, with breaches confined to the inevitable handful of bad guys.
But the law of unintended consequences has kicked in. We always suspected that making the $60 a barrel price cap on Russian crude stick was going to be a tall order to enforce, and so it has proved.
There are few signs that the ‘dynamic price cap’ due to be rolled out next week has dramatically better prospects.
The emergence of both a shadow fleet of tankers and alternative P&I providers of untested quality have rendered sweeping circumvention of the ostensible prohibitions simple.
These vessels are even pioneering new routes. At least five of them have been tracked transiting the Arctic to deliver Russian oil to China over the summer. Basis willing buyer/willing seller, naturally.
There are obvious environmental concerns over this development. Despite the depredations of climate change, the Arctic remains one of the least-polluted regions of our planet.
The consequences of a major spill from an uninsured elderly tanker, in a part of the world with no infrastructure to tackle such casualties, would be colossal. The anger thereafter would not be restricted to card-carrying Greenpeace activists.
This scenario must have been far from the minds of the western politicians who introduced the cap. But that is the way things have developed.
Meanwhile, Zelensky is effectively being asked to sign up to a capitulation that few political careers could conceivably survive. He must now decide whether having Trump hold a metaphorical gun to his head is preferable to having Putin send several armies’ worth of literal guns to the head of his country.
It is always difficult to ask shipowners to take sides in “a quarrel in a faraway country, between people of whom we know nothing”, to quote former British prime minister Neville Chamberlain’s infamous excuse for slicing up prewar Czechoslovakia.
But even if the jurisdiction to which you are subject permits you to undertake the transactions, the moral imperative on this one is clear: keep your ships away.
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