Russian gas moves east as sanctions and maritime disputes tighten
Sanctioned Russian LNG reaches China as the EU bans transactions with 33 banks; Putin threatens European ships and Japan protests his visit to disputed Iturup.
Geopolitics··Evening
LNG from a Kamchatka bay to China
CNN traced the tanker Christophe de Margerie from a port serving the US-sanctioned Arctic LNG-2 plant along the Northern Sea Route to Bechevinskaya Bay on Kamchatka. Satellite imagery shows the ship alongside a floating storage unit in a formation typical of ship-to-ship transfers; according to CNN, it unloaded blacklisted cargo into the unit before turning back toward the Arctic. A second sanctioned tanker, the Arctic Mulan, later loaded at the same unit, switched off its tracking device for about a day in the bay and sailed to the southern Chinese port of Beihai. Charles Costerousse, a senior analyst at the trade intelligence firm Kpler, said a terminal at Beihai has been ringfenced for sanctioned Russian cargoes since last September. Shipping data compiled by the Norway-based Centre for High North Logistics shows that international transit along the Moscow-controlled route has been dominated by trade with China since the full-scale invasion of Ukraine. The same transfer pattern was repeated in July: sanctioned gas is moving east through the short summer window opened with icebreaker escorts.[1]
A transaction ban on 33 banks
Bank listings agreed in the European Union’s 21 sanctions package became operative on Thursday, according to Skadden’s briefing. 33 Russian credit and financial institutions were added to Annex XIV of Regulation 833/2014 and brought under the transaction ban. One bank in Kyrgyzstan enters Annex XLIV in place of an Azerbaijani bank that was removed, while Annex XLV takes on 17 credit, financial, payment and cryptoasset entities together with 5 trading companies registered as FZE or FZCO entities in the United Arab Emirates. The Council adopted the package on 23 July; the texts entered into force on 24 July, the day after publication in the Official Journal, so the bank listings carried a 3-week delay before they bite. In the same package, quarterly reporting on liquefied natural gas cargoes starts on 25 August, and the wind-down window for newly restricted import goods closes on 25 October. Read beside the Kamchatka LNG route toward China, the bank measures show sanctions pressure tightening at both the ship and the banking channel in the same week.[2], [1]
Ship-seizure threats and Iturup
Watching naval drills in the Pacific, Vladimir Putin called Western seizures of Russian merchant vessels nothing other than piracy and banditry and said Moscow will have to respond in kind. He said any response would not be confined to the waters where Russian ships were seized and that action could follow wherever deemed necessary and appropriate. Pacific Fleet commander Viktor Liina told him the navy had enough assets to inspect and detain vessels of unfriendly states and was ready to begin. The UK government defended the June boarding of the sanctioned tanker Smyrtos by Royal Marines Commandos in the English Channel as carried out in full accordance with international law; the ship remains detained near Weymouth and its captain, Ajay Pant, has been charged with breaching Russian sanctions. The UK Ministry of Defence says Russia runs a fleet of more than 700 vessels carrying 75 per cent of its sanctioned oil. In the same period Russian state media reported that Putin visited Iturup, one of the Kuril islands claimed by both Russia and Japan; the BBC says it was Putin’s first visit to the chain. Japan’s Toshimitsu Motegi said the islands are inherently Japanese territory both historically and under international law and that Tokyo strongly protests the visit. Sanctioned gas flowing toward China, the EU bank ban, the ship-seizure confrontation and the Iturup visit together show pressure and counter-signalling on sea and island lines at once.[3], [4]
