The European Commission has dropped plans to ban the transportation of Russian crude oil on EU-flagged vessels in its latest sanctions package, sources close to the negotiations have confirmed.

The proposal was part of a new round of sanctions drawn up by the commission to target Russia’s ability to sustain its ongoing invasion of Ukraine as well as an effort to wean the bloc off Russian energy supplies.

Malta, along with Greece and Cyprus, has been lobbying hard for the proposal to be dropped, with Transport Minister Aaron Farrugia last week saying that Malta was “seeking a compromise” on the issue.

The proposed shipping ban would have made it harder for companies to get around the effects of the EU’s ban on Russian oil

Industry insiders said that the ban could have a massive impact on Malta’s shipping industry, particularly if vessels were unable to reach certain ports.

“Malta has its own interests to protect but we want to balance that with meeting our sanctions obligations,” Farrugia said at the time.

G7 have not come to a similar agreement

Sources familiar with the talks confirmed that, as negotiations had gone only so far, the proposal would not be included in the next package of sanctions.

The proposed shipping ban would have made it harder for companies to get around the effects of the EU’s ban on Russian oil by instead transporting crude oil to other countries around the world.

The Maltese maritime flag.

However, the sources said Malta argued that the shipping ban only made sense if the EU’s international partners, at least those in the G7, were willing to do the same.

As G7 allies have not come to a similar agreement, then the impact would be felt by EU businesses and the business would move on to like-minded non-EU companies willing to transport it, they said.

Ultimately, Malta, backed by Cyprus, held the position that without international cooperation, the sanctions would end up impacting EU operators and not Russia.

'All measures still on the table'

When asked for comment, Farrugia said that Malta would follow and observe all international and European sanctions obligations.

When asked for comment, a spokesperson for the Foreign Affairs Ministry said that sanctions were still being discussed. “All measures proposed under the sixth package have to be agreed to by unanimity and, until now, that this has not been reached. All measures are still on the table and a compromise has to be found for the sixth package to be adopted,” he said.

Malta’s resistance to backing a transportation ban on Russian oil was touched upon by Ukrainian President Volodymyr Zelensky during his address to the Maltese parliament on Tuesday.

He urged Europe to embrace the ban on Russian oil, warning that profits from its transportation came at a greater cost, linking it to pressures caused by rising food costs and migration.

“Each euro and dollar that you can earn will be accompanied by the big losses if you cannot stop the food crisis but also the migration crisis,” he said.