Despite the existing sanctions, Russia continues to generate good income from oil exports by ship. Greek shipping companies are apparently playing an increasing role in this – with potential consequences for other tanker markets as well.
At the beginning of January, the US Treasury Department sanctioned 183 ships owned by Russian shipping companies in the wake of the war in Ukraine, which corresponds to around a third of Russia’s “shadow fleet”.
It consists of a collection of older tankers and cargo ships that have been bought up, renamed and registered under different flags to circumvent Western sanctions.
Despite the sanctions, Moscow continues to generate around $700 million (€663 million) a day from the sale of fossil fuels. According to the data and analysis company Vortexa, one reason for this is the renewed involvement of Greek tanker owners in the transportation of Russian crude oil – particularly to India and Turkey. Before Russia’s invasion of Ukraine, the crude oil transported on Greek oil tankers accounted for around 34% of the total capacity of crude oil exported from Russia, according to the financial market world. Since then, this share has risen to just under 50%.
In December 2022, the G7 countries and Australia agreed a price cap of $60/bbl (€56.8/bbl ) for Russian crude oil in order to limit Russia’s revenue from oil sales and thus restrict the financing of the war in Ukraine. Before the sanctioning of the so-called “shadow fleet”, this price cap could be circumvented relatively easily.
Russia finds ways
According to Trading Economics, Russian Urals crude oil is currently trading at around 65 $/bbl (60.2 €/bbl), i.e. above the G7 price cap. Russia has found ways to push through higher prices despite the sanctions. This means that the price discount compared to Brent oil (€66.7/bbl) is lower than in the past. Nevertheless, Greek tanker owners are still interested in transporting Russian oil, as Russia uses alternative payment and insurance channels or pays higher freight rates.
According to the Centre for Research on Energy and Clean Air (CREA), Russia’s revenues from the maritime transportation of crude oil increased by 13% in January compared to December, reaching €226.7 million per day. China remains the largest buyer of Russian oil. Russia attaches particular importance to maintaining the flow of high-quality ESPO crude oil from the Russian Far East to the Middle Kingdom.
According to CREA, 84% of Russian crude oil sea transportation was still handled by the shadow fleet in January. But in February, the share of Greek shipping companies increased. According to Vortex, Greek tankers were increasingly withdrawn from the Atlantic region, particularly to the Mediterranean. This could lead to a shortage of Aframax tankers in the region and thus to higher revenues for shipping companies in these markets. (rup)
