EU sanctions on Russia oil: Indian arm of UAE-based shipping company takes a hit; Indian-origin captain of crude oil tanker faces sanctions

The European Union has imposed sanctions on Inter shipping Services Hub Private Ltd, the Indian subsidiary of a UAE-based shipping company, for its role in facilitating vessels involved in the trade of Russian crude oil and petroleum products amid the Russia-Ukraine conflict. Additionally, Captain Abhinav Kamal, the Indian-origin captain of the crude oil tanker Argent, has become the only Indian national sanctioned in relation to these EU measures.

Impact on the Shipping Entity and Captain

The shipping industry and its captains of industry are impacted by fluctuating freight rates, crew shortages, and geopolitical instability, alongside increased environmental regulations demanding decarbonization. These factors create both challenges and opportunities: while some periods see profitability, leaders must now navigate the rapid adoption of digital technologies, investments in greener vessels, and more complex global logistics to ensure efficient operations and a positive future for the industry. 

• Intershipping Services Hub Private Ltd faces asset freezes within the EU, and all EU citizens and businesses are prohibited from financial transactions or trade with the company[1][3].
• These sanctions do not extend to non-EU jurisdictions, so the company may still operate outside EU territories, but global maritime linkages with Europe will pose operational challenges[2][4].
• Captain Abhinav Kamal can no longer board or provide services to EU-associated vessels, with the EU accusing him of providing material, technical, or financial support for the shipment of Russian oil[1][2][3][4].

Broader Impact on Indian Oil Operations

• Indian refinery operations are affected, as shipping companies are now reluctant to work with Indian oil refining firms such as Nayara Energy, which has significant Russian ownership (49.13% stake by Rosneft PJSC)[1][8][9].
• Media reports cite that vessel operators are withdrawing from crude import and export arrangements with Indian refiners following the EU’s latest sanctions package; for example, a vessel scheduled to pick up diesel cargo from Nayara aborted its planned stop[1][8][10].
• The EU’s ban on imports of refined petroleum products derived from Russian crude applies even when processed outside Russia, potentially impacting up to $14.3 billion worth of Indian petroleum exports to Europe in 2025[8][9].

Key Takeaways

• The sanctions illustrate the EU’s expanding crackdown on “circumventing” Russian oil restrictions via third countries, especially as India has become a prominent processor of discounted Russian crude for European markets[9][11].
• While the Indian government has reiterated its position of not recognizing unilateral, non-UN sanctions, the real-world impact is being seen in business disruptions, vessel halts, and financial restrictions for entities named in the EU’s action[4][12].
• Captain Abhinav Kamal’s inclusion highlights the personal risk faced by maritime personnel engaged in Russian oil trade under heightened international scrutiny.

The ongoing EU sanctions are set to reshape oil processing and trading arrangements involving Russian crude, with direct consequences for Indian-linked shipping and refinery businesses and personnel.

EU’s sanctions on Russia oil have hit an Indian branch of a UAE-based firm. Intershipping Services Hub Private Ltd, an Indian subsidiary of a UAE-based company, has been hit with sanctions from the European Union.The EU has also imposed sanctions on Captain Abhinav Kamal, who commands the crude oil tanker Argent, according to an ET report.

 levelled allegations against Kamal for giving material, technical and monetary assistance to operations involving vessels that transport crude oil or petroleum products connected to Russia.According to industry observers, Kamal is the only Indian national to face EU sanctions related to the Russia-Ukraine conflict. The firm faces accusations of sheltering vessels involved in Russian trade operations.Also Read | US sanctions warnings unheeded: Indian firm exports explosive compound to Russia; HMX widely used in missile & torpedo warheads

Scope of EU Sanctions

The scope of these sanctions is limited to EU territories, citizens, and organisations. India on its part continues to reject unilateral sanctions imposed by other nations.”This means the assets that Inter shipping Services LLC holds in Europe will be frozen and European citizens and companies cannot make money available to it, hence cannot do business,” an EU official told ET.

Financial calculators

• Ramasami Sankara61 days agoIndia should reject EU, should not bother too. India can put counter sanction and show our full independence. No one should be allowed to dominate India as we should be Self Reliant.ReplyShow responses61flag
• User KumarUser 62 days agoThe impact of these EU sanctions is minimal as EU does not have much influence on Oil trade. Alternative ships and services are available. UK has influence on maritme insurance with Lloyds one of the biggest. But UK is not part of EU. So just a storm in a tea cup.Reply21flag
• Shakeel Hussain days ago another failure by our external Minister Show response 26 flag.

The European Union’s sweeping sanctions against Russian oil exports have started affecting Indian entities. The EU has blacklisted Intershipping Services Hub Pvt Ltd—an Indian arm of a UAE-based maritime firm—and sanctioned Indian-origin Captain Abhinav Kamal for allegedly aiding Russian crude shipments. The move signals growing scrutiny of global shipping routes amid rising geopolitical tensions.

The EU accuses both the firm and the captain of “providing material, technical and financial assistance” to Russia-linked crude oil operations.

In a significant escalation of the European Union’s sanctions targeting Russian oil trade, Intershipping Services Hub Pvt Ltd, the Indian subsidiary of a UAE-based shipping conglomerate, has been placed on the EU sanctions list. Captain Abhinav Kamal, an Indian national commanding the oil tanker Argent, has also been individually sanctioned.

The EU accuses both the firm and the captain of “providing material, technical and financial assistance” to Russia-linked crude oil operations. This includes aiding vessels involved in transporting oil or petroleum products that breach EU restrictions. “This means the assets that Intershipping Services LLC holds in Europe will be frozen, and European citizens and companies cannot make money available to it,” an EU official told ET.

Why it matters:

The sanctions come as part of broader efforts by the EU to crack down on Russia’s shadow oil trade, especially as Moscow continues to seek buyers outside the West. These measures are now tangibly impacting Indian ports, refiners, and shipping corridors, particularly due to Russia’s deepening energy ties with India.

According to reports, Captain Kamal becomes the first Indian national sanctioned by the EU in connection with the Russia–Ukraine conflict, with maritime experts suggesting he could face major restrictions within EU-linked maritime networks.

Impact on Indian Businesses: Nayara Feels the Heat

India may not formally recognise unilateral sanctions imposed by external jurisdictions, but fallout is already evident. Nayara Energy, which is nearly 49.13 per cent owned by Russia’s Rosneft PJSC, is witnessing a slowdown in port activity.

Sources told Bloomberg that tanker operators are growing wary of calling at Vadinar, where Nayara’s key refinery is based. In one such case, the ship Talara reportedly abandoned a diesel pickup and left the port abruptly following fresh sanctions last week. “Several shipping firms are showing reluctance to deal with Nayara for crude imports and product exports,” the Bloomberg report noted, indicating operational isolation.

Legal and Economic Scope of Sanctions

While the sanctions apply only to EU citizens, entities, and jurisdictions, the ripple effects are global due to the EU’s influence in maritime trade. Non-EU firms can technically still do business with the Indian entity, but market risk and reputational concerns often prevent them from doing so.

India, on its part, continues to reject unilateral extraterritorial sanctions. However, financial institutions, insurers, and shipping firms with European exposure often comply de facto to avoid legal consequences.

What Next?

With India and Russia strengthening energy and defence ties, and the EU simultaneously expanding its sanctions net, Indian businesses may increasingly be caught in geopolitical crossfire.

The case also sets a precedent for enforcement against individuals and subsidiaries far from the core conflict zones. It remains to be seen whether India will diplomatically protest these sanctions or sidestep them silently as it has in previous similar episodes.

How to transform your shipping Company share

How to transform your shipping company

After a few boom years, the global shipping industry faces a potential downcycle—but increased digitization can help companies prepare for volatility.

DOWNLOADS

Players in most shipping subsectors have enjoyed a profitable couple of years. However, the industry faces a complex, rapidly changing environment. Macro uncertainties—the threat of recession, geopolitical volatility, crew shortages, escalation of operational costs, and fluctuations in cargo demand—affect all aspects of operations. In addition, there is increased environmental regulation to get to grips with, and much uncertainty around decarbonization pathways.

Crucially, the shipping industry lags behind in digitization, a key enabler for prompt decision making, operational and cost efficiencies, and improved performance. This article introduces a transformation framework to help shipping companies navigate these choppy waters. In particular, it explores how data and analytics can be leveraged to gain competitive advantage and unlock value.

Coming off a supercycle, shipping encounters volatility

Recent years have been a boom time for most shipping sectors—for some, notably containers, the gains have been unprecedented. For one thing, demand has been vigorous, buoyed in the container sector by strong US imports. The invasion of Ukraine and subsequent sanctions have also had an impact, forcing different routings and consequently more ton-miles of bulk and tanker shipping.

This surge in demand came at a time when supply was effectively reduced due to port congestion (resulting from increased volumes) and pandemic-related disruptions of labor and trucking across the supply chain. With demand frequently exceeding supply, shipping rates rose for many vessel types and sizes.

However, these conditions are changing, and the current outlook is volatile. We may be witnessing the start of a new downcycle for the industry.

Complex headwinds for all shipping players

This challenging climate is the product of multiple factors. Inflation has been on the rise, leading to less demand for consumer goods. That demand has also shifted back to services, away from the physical goods that powered the lockdown boom.

With the geopolitical turmoil in Europe, ton-miles have been impacted by structural changes in cargo flows, with high uncertainty as to when these would normalize, and what the new normal would be. Meanwhile, slowdowns in Chinese construction are reducing the demand for iron-ore shipments.¹ Tanker trade remains strong, but developments in Russia and Ukraine may yet affect these flows.

Skilled crew sourcing continues to be a significant challenge in the post COVID-19 era, affected by disruption in European labor pools and shortages in Asian pools. Russia and Ukraine are two of the top five source nations for seafarers, and difficulties in sourcing from these countries have compounded an existing scarcity of skilled crew.²

Shipping is not on track to meet International Maritime Organization (IMO) CO2 emissions-reduction targets, and the industry is under continuous pressure to decarbonize.³ Meeting these targets requires a portfolio of levers covering both fleet and fuel—and shipping companies need to work out which ones to pull, in a combination that makes economic sense. Without improvements, many vessels will not be CII (carbon-intensity indicator) compliant by 2030. Specific pathways are still uncertain and expensive, and shipowners face tough choices around retrofitting, buying new vessels, and securing green-fuel bunkering supply.

Subsectors face different scenarios

Against this unpredictable backdrop, different baseline scenarios seem likely to evolve in the tanker, bulker, and container segments (Exhibit 1).

Exhibit 1

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Oil tankers: As the oil price surges due to geopolitical dynamics, short-term demand for tankers is expected to stay strong. However, oil consumption is predicted to peak between 2024 and 2027 as oil demand is largely dependent on the speed of electric-vehicle uptake (Exhibit 2). Growth of both bio- and synfuels may further reduce the need for crude oil, which will reduce demand for very large crude carriers (VLCCs)—an expectation already reflected in the sector’s small orderbook.

Exhibit 2

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Bulkers: In the short term, this segment will be supported by spikes in coal demand (driven by Europe’s shift away from Russian gas as well as longer voyages for grains, both resulting from disruptions in Ukrainian exports).

However, demand is expected to decline as regulatory and financial pressures mount. With national commitments to phasing out coal-fired power, rising carbon pricing (from $100 to $200 per ton by 2050), local air-quality concerns, and the favorable economics of renewables and natural gas, there is considerable downward pressure on long-term coal consumption. In an accelerated decarbonization scenario, coal demand is expected to drop by 60 percent from today’s levels, reaching 3,095 million tons by 2050.⁴

New orderbook of bulk vessels is small, driven by expectations of lower future growth—which can lead to more healthy charter rates.

Containers: The unprecedented profitability peak in this segment is driven by demand spikes and short-term port congestion (resulting from labor shortages and operational disruptions). However, congestion is easing and demand is normalizing. Prices are beginning to settle back to pre-pandemic levels as the supply-demand balance returns. Orderbook currently stands at 25 percent of the active fleet, an expression of industry confidence in this segment.

Now is the time to invest in resiliency

Across segments, shipowners are at a crossroads—especially regarding latest decarbonization imperatives. To prepare the fleets for a new era of sustainability, significant decisions on capital-expenditure allocation (both newbuilds and retrofits) over the next 10–20 years need to be made.

Given the lack of clarity around which technologies and fuels will mature and become dominant, many shipowners are choosing to wait and see before committing capital. But with a downcycle in the offing, it would be prudent for shipping players to invest now in resiliency. Many shipping companies are sitting on cash which, wisely spent, could protect them from volatility and poise them for success. Now is the time to transform for the cycle to come.

Would you like to learn more about our Travel, Logistics & Infrastructure Practice?

Launching a successful transformation enabled by digital and analytics

We propose a transformation framework based on three pillars: strategy, commercial excellence, and vessel-cost optimization (Exhibit 3). This could be enabled by digital and analytics, as well as fit-for-purpose organizational setup, governance, and capabilities.

Exhibit 3

Strategy

Strategic considerations include choice of vessel segment and size, ownership model, and target customer or charterer segments. Shipowners might also contemplate expanding into adjacent steps of the supply chain, such as terminals or inland logistics. Operators with in-house ship-management capabilities could enhance their reliability and service delivery by taking vessels on bareboat charter, or by offering ship-management services to vessels on long-term charter and operating with their crew.

Shipping companies can draw on data and analytics to improve decision making around fleet composition. For example, these techniques can identify supply and demand imbalances for specific vessel segments by combining outlooks for cargo demand and vessel capacity.

This sheds light on which vessel segments and sizes to favor in the medium term. Dry-bulk modeling predicts continuing growth in demand, likely outpacing supply, for commodities primarily transported by smaller vessel classes (Supramax and Handysize). On the other hand, if iron ore and coal demand shrink as expected, the demand-to-supply ratio for larger vessel classes (such as Capesize and Panamax) will decrease (Exhibit 4).

Exhibit 4

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Commercial excellence

Ship owners can improve revenue generation with data-informed decisions around fleet deployment, pool partnering, time chartering in and out, and hedging via implementing forward-freight agreement (FFA) trading to leverage the natural long position in vessels. Operators can do likewise, using data to aid decisions regarding cargo booking and time chartering of tonnage.

For example, data and analytics tools could be used to optimize fleet positioning based on the evolution of cargo flows in front- and back-haul, analyzing the drivers for rate/return variability, and short-term market dynamics.

Hyperlocal data—weather, wind, currents, and waves, combined with real-time views of port traffic, congestion, terminal activities, and other approaching vessels—could be deployed to optimize routes, fuel consumption, and port turnaround time, as well as manage vessel delays and just-in-time arrivals.

Cost optimization

Cost-optimization levers can be enabled by collecting and analyzing data and building digital applications to inform decision making. Digital tools can help to identify trends, optimize crewing spend and the overall procurement envelope (spares, stores, provisions), and streamline repair, maintenance, port, drydocking, and bunkering costs.

Client experience has shown that various levers can improve cost performance in specific areas of shipping:

Crewing: Shipowners could leverage analytical tools to identify the right talent, improve ship-to-shore communications, and revamp safety- and quality-assurance procedures. Data tools could aid in optimizing factors such as crew remuneration, number of crew onboard, nationality mix, medical claims and welfare, travel scheduling, training, and recruiting.

Procurement: A spend-intelligence dashboard could provide real-time insights and transparency. Further, digital tools could standardize the procurement process, define supplier-specific strategy, consolidate purchases, and reduce unplanned spend.

Shipping companies that rely on manual processes often struggle to track their expenditure by supplier, location, or even product or service type. This can cause a lack of comprehensive planning of purchases such as spare parts. Suppliers cannot be selected in a systematic way, and companies miss out on volume discounts and delivery-pool savings. They may also incur higher operating expenses with emergency procurement and repairs.

Such companies could invest in technology that provides digital dashboards. Here, real-time insights and analysis across key metrics can be accessed easily. Spend details can be sorted by type, category or organization, and details made instantly available by clicking on a specific deep-dive area (Exhibit 5).

Exhibit 5

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

Dry docking: Digital solutions are now available to optimize dry-docking processes and ensure full transparency. These can help to standardize processes, gain greater negotiation power with suppliers, optimize timing and location, pool vessels to benefit from scale and synergies, and increase the vendor pool.

Bunkering: Digital techniques can be used to implement vessel upgrades, find optimal bunkering locations, obtain better bunkering bids, execute hedging strategy, and review vendor contracts.

Consumption can be reduced with optimized vessel execution and performance-management mechanisms. For example, one shipping operator was looking to optimize varying fuel consumption. However, fuel and emission data were lacking. There was also a lack of transparency about captains’ voyage decisions, and no comparisons of their performance. The solution was the installation of a new data interface between vessels and central IT. This created transparency around key levers, such as speed, slip, trim, and fuel type, and leveraged automatic identification systems (AIS) and weather data for route mapping and fuel-type usage. A dashboard was developed to report key metrics to fleet operations and captains (Exhibit 6).

Exhibit 6

We strive to provide individuals with disabilities equal access to our website. If you would like information about this content we will be happy to work with you. Please email us at: McKinsey_Website_Accessibility@mckinsey.com

These developments resulted in a 1 percent decrease in fuel spend (on a base representing 50 percent of total vessel and voyage costs). Another positive impact was that the system engendered healthy competition between captains, improving voyage performance.

Newbuilds: Significant impact can be achieved by applying a design-to-value approach to vessel acquisition, considering total cost of ownership for each design choice. For example, operational reliability and operating-expenses forecasts can be optimized in joint design phases with shipyards and component suppliers.

Enablers

Many of these transformation levers are enabled by sophisticated use of digitization—a relatively new area in shipping, especially in the tramp segments. In anticipation, investment in maritime startups focused on digital applications has skyrocketed recently, reaching almost $3 billion over the past two years.⁵ Shipowners can take advantage of these developments in all aspects of their business—but to do so requires a concerted effort to build digital teams and capability.

Companies that have undertaken such transformation journeys have seen significant improvement in EBITDA: 10–20 percent on a run-rate basis. They have also future-proofed their businesses, solidifying their decarbonization plans and building in resiliency, resulting in higher shareholder value.

A three-phase plan to achieve transformation

The proposed three-pillar transformation framework is not a one-size-fits-all solution. While it covers all the elements of a holistic enterprise-wide transformation, companies may focus on different pillars or areas depending on needs, context, and where they are in their digitization journey.

Shipowners could consider a three-phase plan, operating across all pillars and enablers, to set their transformation in motion.

Phase 1: Diagnostics: Define the starting point and seize the opportunity. Collect data pertaining to the market, the company, and peer groups; this may include vessel deployment, returns by route, and cost breakdowns. Analyze this information to define a baseline, then identify the improvement potential and opportunity space.

For example, an owner of more than 20 dry-bulk vessels performed an internal comparison between sister vessels across all opex sub-categories, applying industry benchmarks. This identified significant variations in procurement-related categories (such as spares, stores, and lubes) and revealed a cost base 15 percent above industry average, all else being equal.

Phase 2: Solution design: Define the key levers that will drive impact, develop a detailed plan for each one, design first concepts, and implement quick wins. For example, build tools to help optimize fleet deployment, taking into account supply-demand imbalances.

The same dry-bulk vessel owner applied analytics to develop a spend cube, define sourcing opportunities, and create a clear strategy for vendor selection and negotiations in each spend category. This approach, starting from overall spend visibility by category, helped them focus on a smaller set of providers and achieve an average cost reduction of 7 percent.

Phase 3: Implementation: Execute on the plan developed. Put in place a monitoring mechanism to evaluate progress towards the potential identified in the diagnostic phase. Flag diversions and ensure corrective action is taken. Focus on developing capabilities to ensure sustainable impact in the long-term.

To track savings and maintain impact, the vessel owner set up an internal performance-monitoring team, equipped with the analytical tools to track spend and consumption across different categories. They also implemented weekly standups between fleet teams for best-practice sharing, and monthly reports on specific KPIs to the fleet manager.

---

Shipping may be coming off the peak of a cycle. Smart companies are using their cash to invest now in transformation, making them resilient for the next cycle. Much of this transformation requires an upgrade in digital capabilities. Done right, this can enable the emergence of modern, data-driven companies with excellent intelligence to support their commercial and cost decisions.