Malta’s objection to a fresh round of EU sanctions on Russian oil is sparked by fears the move could trigger an exodus of ships from the bloc’s flag registries, shipping experts say.
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.
Crucially, the new price cap has not been agreed at G7 level, meaning some G7 countries, such as the US, would be exempt.
Times of Malta spoke to two maritime experts to understand why Malta is worried about this move.
‘Two different price regimes’
Adrian Attard and Matthew Attard, both specialists in maritime law, agree that the issue is ultimately about how the new rules would impact the EU’s shipping industry as a whole, not just Malta specifically.
Adrian Attard is a partner at Fenech & Fenech Advocates, specialising in maritime law. Photo: Fenech & Fenech Advocates“This will create confusion across the industry because there will be two different price regimes, that of the EU, and that of the current price cap adopted by the rest of the G7 and certain other non-EU states,” Adrian Attard says.
Matthew Attard agrees, pointing to how the situation will create an uneven playing field.
“The key issue is that the price cap is not harmonised, which could result in more widespread forum shopping,” he says.
In practice, an EU-registered vessel would be barred from carrying oil sold at a value higher than the new cap, while a ship registered outside the EU would either need to abide by the 2022 cap of $60 or, in some instances, are not bound by a cap at all.
Official EU figures show that some 38% of all sea cargo handled at EU ports consisted of crude oil and oil products.
This raises concerns over an exodus of ships from the EU, with ship owners possibly choosing to re-flag their ships to other non-EU jurisdictions, where the new price cap would not apply.
Matthew Attard is the Malta Maritime Law Association President and a partner in Ganado Advocates’ shipping team. Photo: Ganado Advocates“After the 2022 sanctions we saw a surge in the number of tanker sales from EU sellers to non-EU entities outside the jurisdiction of EU sanctions,” Adrian Attard says. “It took some time for the EU to introduce additional measures to plug this gap, so Malta is pushing to avoid a repeat of the situation”.
Reflagging, the process of moving a ship’s registration from one country to another, is believed to be a growing issue across the shipping industry. Industry press reports earlier this year found that over a third of all vessels sanctioned in 2025 had already reflagged to new (often less reputable) flags, at a pace described as “unprecedented”.
Malta, which holds the biggest flag registry in Europe, is particularly concerned about the potential impact of reflagging.
Several other countries, particularly the Marshall Islands, Panama and Liberia are already known to be popular jurisdictions for operators looking to reflag their ship, but experts fear that things could get worse if non-EU G7 countries also become potential reflagging destinations.
A weaker EU fleet
An exodus of EU-registered ships would have a further unintended consequence, experts fear, namely that of weakening the EU’s jurisdiction over the shipping industry as a whole.
In simple terms, if there are fewer EU-registered ships, the EU will be unable to enforce its standards across the industry.
“The EU is a pioneer in environmental protection,” Matthew Attard argues. “But if ships are registered elsewhere, those standards can’t be enforced”.
More broadly, the EU risks losing influence across the industry if the size of its fleet shrinks, the experts warn.
“You need to address potential issues holistically, including the risk of depleting the EU fleet,” Adrian Attard says.
Diplomatic sources who spoke to Times of Malta on Monday hinted at this, saying Malta is concerned by the cap’s unintended consequences, rather than objecting to the cap in principle.