Government should ‘use every power’ to block new Russian oil sanctions

The Nationalist Party has called on the government to “use every power” to ensure the new proposed sanctions against Russian oil do not lead to “unintended and harmful” disadvantages to Malta.

On Thursday, the party expressed its concern over the consequences of new price capping sanctions on Russian oil for the maritime sector saying they risk harming countries such as Malta and “doing more harm to countries like ours than to their intended targets”. 

“We must ensure that Malta, already disadvantaged by its island status, is treated fairly,” the PN said.

Malta has objected to a new round of EU sanctions on Russian oil over fears that the move could trigger an exodus of ships from the bloc’s flag registries, according to shipping experts.

An initial set of  sanctions on Russia, introduced in December 2022 and agreed upon by the G7, set a price cap of $60 per barrel on Russian oil. In practice, the sanctions made it illegal for any ship registered in the EU or a G7 country to carry oil sold above the cap.

A new set of sanctions currently being negotiated would lower this cap, reportedly to 15% below the average market price of crude oil over the previous three months.

The PN appealed to the government “to use every power it has within the EU Council of Ministers to ensure that the proposed sanctions do not lead to an unintended and harmful outcome that could disadvantage a sector that is so vital to both Malta and the EU.”

The Opposition said it was concerned that the new proposed EU sanctions on Russian oil could disadvantage vessels flying the Maltese flag, or that of any EU member state, when compared to vessels registered in non-EU countries that are not affected by such sanctions. This could potentially lead to shipowners de-registering from Malta, the party warned.

“Experience shows that once a ship changes its flag, it is difficult to bring it back, which could result in major financial losses for Malta,” the PN said, adding it believe the Maltese maritime sector can continue to grow by reducing bureaucracy and improving access to registration, while maintaining the strong reputation Malta has earned in this domain.