Malta’s maritime sector could face ‘increased scrutiny’ in latest EU sanctions package – Stephanie Fabri

European Union envoys are on the brink of finalising the 18th package of sanctions against Russia, a move that includes introducing a lower price cap on Russian oil exports. According to multiple EU sources, the package – expected to be formally approved by foreign ministers this week – features a “dynamic” pricing mechanism.

The European Commission has proposed setting the cap at 15 per cent below the average crude price over the previous three months. Based on current calculations, this would amount to roughly $47 a barrel, with reviews now set to take place every six months instead of three.

While most EU member states have agreed on the measures, Slovakia had held up proceedings over concerns related to phasing out Russian gas supplies. Nonetheless, sources confirm that Slovakia has since dropped its objections, clearing the way for an agreement.

Speaking to BusinessNow.mt on the broader implications of these developments, Stephanie Fabri – Lecturer within the Department of Business and Enterprise Management at the University of Malta – highlighted how the European Union is facing a critical juncture in its maritime and economic strategy amid heightened geopolitical tension.

“As the global maritime sector adapts to a more complex geopolitical and regulatory environment, the European Union finds itself at a critical juncture,” she said. Dr Fabri noted that tighter enforcement of sanctions, internal divergences within the G7+, and the decline of the EU-flagged fleet all risk undermining the EU’s economic influence and regulatory credibility.

Malta, with one of the largest shipping registries in the world, serves as a case study in this evolving landscape. Its open registry model has long been attractive due to its “efficiency, regulatory compliance, and commercial flexibility,” Dr Fabri explained. However, she cautioned that intensifying sanctions may place added pressure on flag states like Malta.

“Flag states such as Malta may come under increased scrutiny. This is likely to prompt some shipowners to reassess their registration decisions, particularly where compliance obligations become more complex or reputational risk increases,” she remarked.

Still, she maintained that Malta’s long-term competitiveness does not depend on regulatory leniency. Instead, it lies in “continued alignment with international norms, transparent governance, and a regulatory environment that inspires trust.” Strengthening institutional capacity and delivering high-quality services, she argued, would allow Malta to strike a balance between “economic viability and regulatory responsibility.”

At a wider EU level, Dr Fabri stressed the importance of unity among G7+ members. The price cap mechanism – designed to limit Russian revenues without destabilising global energy markets–could be compromised if the EU acts unilaterally.

“Should the EU move unilaterally to lower the price cap – without parallel commitments from the US or UK – it may inadvertently weaken the mechanism’s effectiveness,” she warned. Disparities in enforcement thresholds could allow for circumvention through non-EU markets, she added, undermining collective leverage and making compliance harder to track.

Dr Fabri also highlighted concerns over the shrinking size of the EU-flagged fleet, noting that these vessels play a crucial role in upholding high environmental, safety, and labour standards. A diminished fleet, she said, could weaken the EU’s voice in international forums like the International Maritime Organization (IMO), particularly when it comes to setting global standards on sustainability and decarbonisation.

“While high standards must remain a cornerstone of the EU’s maritime policy, retaining flag competitiveness may require renewed efforts to streamline regulatory processes, reduce administrative complexity, and actively engage with the industry,” she suggested. As the sector moves towards digitalisation, alternative fuels, and green financing, the regulatory framework must evolve in tandem.

The EU has already made progress through initiatives such as the EU Emissions Trading System and the Ship Recycling Regulation.

However, Dr Fabri emphasised that a strong EU-flagged presence is key to ensuring these policies have the necessary jurisdictional reach and impact.

Ultimately, she argued for a “measured and coordinated EU maritime strategy – one that balances regulatory ambition with practical feasibility, and competitiveness with global responsibility.” By reaffirming its high standards and fostering conditions that support ongoing investment, the EU can continue to influence the future of global shipping.

“The road ahead requires pragmatism, dialogue, and collaboration between policymakers, industry leaders, and international partners,” Dr Fabri concluded.

In doing so, she believes, the EU can navigate the current geopolitical landscape while keeping its maritime sector resilient, innovative, and influential.