Sanctions and Sovereignty at Sea: Malta, Greece, and Europe’s Shadow Fleet Problem

What follows is a Bloomberg report stating that Greece and Malta have become the main obstacles to an EU proposal to replace the price cap on Russian oil with a ban on services necessary for transporting fuel. The report was analysed by Arthur Rehi, who wrote a series of tweets about this story, which have been compiled into the following article.

“According to the agency’s interlocutors, the two southern European countries raised concerns about this step at a meeting of EU ambassadors on Monday, where the latest sanctions package against Russia was presented. They warned that such a shift could affect Europe’s shipping industry and energy prices. Both countries also requested clarifications on proposals to impose sanctions on foreign ports handling Russian oil and to strengthen oversight of ship sellers to reduce the number of vessels entering Moscow’s fleet. A representative of the Greek government declined to comment.

Nestor Laiviera, Malta’s representative in Brussels, said the country is “engaging in technical discussions to ensure the outcome is workable.” Last week, the European Commission proposed replacing the existing price cap on Russian oil with a ban on services required for its transportation. This proposal is a central element of the EU’s 20th sanctions package over Russia’s full-scale invasion of Ukraine. EU sanctions require the support of all member states for approval and may change before adoption, with the bloc aiming to finalise the package by the end of February. Malta and Greece play key but different roles in the functioning of the so-called shadow fleet used to export Russian oil in circumvention of sanctions. Malta is one of the world’s largest ship registries and a classic flag-of-convenience jurisdiction.

Registration under the Maltese flag attracts the shadow fleet due to the anonymity of ownership structures, the absence of crew nationality requirements, tax advantages, and high operational flexibility. The formal flag of an EU member state can temporarily reduce regulatory scrutiny and facilitate access to European maritime infrastructure. According to the European Parliament, up to 8% of the global shadow fleet may sail under the Maltese flag, although Malta has recently claimed it is tightening controls and threatening to revoke registrations. Greece, by contrast, is less a flag of convenience than a key owner and supplier of tanker tonnage. Greek shipowners continue to legally transport a significant share of Russian oil, up to 35% of exports in early 2026. At the same time, Greece has become the main source of ageing tankers for the shadow fleet, as decommissioned vessels are sold to anonymous buyers who then register them under Panamanian or Liberian flags. Athens actively lobbies within the EU to soften sanctions, fearing damage to its shipping industry, while Greek waters are frequently used for ship-to-ship transfers to conceal the origin of Russian oil. As a result, Greece and Malta remain among the main brakes on the introduction of a full ban on maritime services for Russian oil under new EU sanctions packages.”

The approval of the 20th package of anti-Russian sanctions by the European Union has met with resistance from two countries at once: Greece and Malta. They do not support the proposal to replace price restrictions on Russian oil with a ban on services necessary for fuel transportation.

Points of attention

Discussions on strengthening supervision of ship sellers and imposing sanctions on foreign ports for transshipment of Russian oil add layers of complexity to the ongoing debate on EU sanctions against Russia.
The EU aims to reach a consensus on the 20th package of sanctions by the end of February, emphasizing the importance of unified support from all member countries to address the full-scale invasion of Ukraine by Moscow.

New EU sanctions against Russia are again under question

According to insiders, both Greece and Malta are allegedly concerned that the new proposal from official Brussels could affect the European shipping industry and energy prices.

In addition, each of these countries wants to hear explanations regarding proposals to impose sanctions against foreign ports for transshipment of Russian oil and to strengthen supervision of ship sellers.

Against this background, it should be recalled that it was Greek and Maltese companies that transported Russian oil to the EU for a long period of time.

Moreover, not so long ago, Athens and Valletta blocked the lowering of the price ceiling for Russian raw materials.

The European Commission is not giving up yet and is proposing to replace the current price ceiling for Russian oil.