15 flagship vessels that move ‘ghost crude’ detected

15 flagship vessels that move ‘ghost crude’ detected
15 flagship vessels that move ‘ghost crude’ detected

Russia continues to dump its oil all over the world, and the West has been able to barely stop it. G-7 countries led by the US and the European Union have approved sanctions and a price cap on Russian crude oil to torpedo Moscow’s main source of funding for its war effort in Ukraine, but at the same time not to shake up the world oil market. However, Vladimir Putin’s regime has successfully circumvented these obstacles with a phantom fleet of old tankers without Western insurance amidst continuous calls from Kiev’s allies to do more. New and revealing data shows that if the US and EU sanctioned and pursued just 15 ships in the shadow fleet of Sovcomflot, Russia’s big state-owned shipping company, they would be blowing a deep hole in Moscow’s oil revenues.

So far, US and EU attempts to curb Russian oil sales have been ineffective. Russian oil production is the litmus test. Before the Covid-19 pandemic, Russia pumped about 10.5 million barrels of crude oil a day. Today, Moscow is producing around 10 million barrels per dayan extraordinary amount if we take into account the cuts announced by OPEC+ (of which Russia is a member) and the Western sanctions on Russian crude oil. These figures put the US and its allies in a serious bind, since if Russia were not included in the OPEC+ cut agreements, the country could be producing crude oil at record levels, which reveals a harsh reality: Putin is selling his oil without problems and making money to finance the war.

Meanwhile, the West is still looking for ways to cut off this source of revenue without causing an earthquake in oil prices (blowing and sucking at the same time has always been difficult, if not impossible). Last autumn, the US Treasury seemed to get its act together by calling in shipping companies that were helping Putin. Recently, the UK sanctioned an oil tanker on suspicion of belonging to the Russian ghost fleet and it has remained mothballed in the Baltic ever since, opening a path to harming Kremlin interests.

15 ships with frenetic activity

However, more can still be done and a group of experts has found a very specific and ‘juicy’ target: 15 oil tankers with frenetic activity. within the fleet of more than 100 vessels owned by Sovcomflotnot only the largest shipping company in Russia, but one of the world leaders in maritime hydrocarbon transportation.

Sovcomflot had already been the target of direct and indirect sanctions by the G7 and the European Union, forcing the company to transfer many of its tankers to shadow companies based in countries far outside the Western orbit or considered neutral at best, leading to a growth in the shadow fleet.

According to its website, Sovcomflot currently has a fleet of 120 tankers. About 20 of these vessels are now sanctioned, counting the 14 vessels flagged by the U.S. Treasury on February 23 and six tankers sanctioned previously. Of the remaining 100, 15 represent the bulk of the fleet’s activity. According to Bloomberg’s database for tracking tanker traffic around the world, These 15 main vessels account for half of Sovcomflot’s volume in terms of exports from Russia. The bulk of these 15 vessels are Aframax, a category of tankers with a deadweight (safe loading capacity) of between 80,000 and 120,000 metric tons and capable of carrying around 600,000 barrels of oil.

“The most straightforward, and perhaps obvious, option facing US policymakers is to expand the plan announced on February 23 that sanctioned 14 Sovcomflot tankers and sanction the remaining 100 Sovcomflot tankers that have not yet been identified for enforcement. Such a move would be consistent with previous actions and would significantly limit Russia’s ability to transact above the respective price ceilings,” strategists Robin Brooks and Ben Harris write in an article published by the Brookings Institution, a nonprofit organization based in Washington.

Furthermore, these experts argue that this tightening of sanctions would probably have a limited impactif it has one, in world oil pricesHowever, the risk is there. Disrupting maritime oil flows increases costs and reduces the efficiency of oil shipments. In a tense market like the current one, where Brent is at $86 a barrel and with several elections just around the corner (USA, France…), few dare to push certain buttons for fear of being blamed for a new rise in the price of crude oil.

However, Brookings analysts believe that sanctions could be even more subtle and sophisticated: the key is to “touch” or sanction, precisely, the activity of the aforementioned 15 tankers: “With the sanction on these 15 vessels, it is possible to attack more than half of Sovcomflot’s remaining export capacity outside Russia. To ensure a minimal impact on the price of crude oil.”

The US could go calibrating future sanctionsintervening little by little so as not to create chaos or stress in the crude oil market. “In 2023, these 15 vessels accounted for 7% of total Russian seaborne oil exports, compared with 2% for the 14 vessels sanctioned on February 23. In other words, it may be worth sanctioning the remaining fleet of Sovcomflot vessels in small waves to minimize the effects on prices,” Brooks and Harris point out.

To understand the significance of these sanctions, one need only look at Russia’s oil numbers for 2023. Revenue from oil and gas sales going into Russian coffers amounted to 8.822 trillion rubles (almost $100 billion) last year, Finance Ministry data showed. This amount of money is more than the entire amount spent on defense by India each year or five times what Spain spends, for example.

The cat and mouse game with oil

It must also be admitted that Russia and its shipping companies do not make things easy. A good example is the constant change of flag carried out by ships transporting oil, which makes sanctions and prosecution difficult.

A recent Bloomberg report explained precisely the flag swaps between Russia and Gabon in the Russian tanker fleet. For example, these four tankers: Kemerovo, Belgorod, Kaliningrad and Krasnoyarsk They have exchanged flags several times in a short space of time.

According to real-time data to which elEconomista.es has had access, Kemerovo, for example, currently has a Russian flag and is near Koporie Bayalong with other Russian ships that are part of the shadow fleet. This is a small, shallow Russian bay located on the southern coast of the Gulf of Finland. Although its location is close to Finland and other allied countries (the Baltic states), administratively, it belongs to the Leningrad Oblast, that is, it is controlled by Moscow.

Bloomberg also claims that when there are flag changes, these ships change to alternative names such as Colón, Bravo, or Capitán. These are the names they have when they are registered in Gabon. Bloomberg explains that these ships were built between 2006 and 2010.

However, while the West has the ability to stop Russian oil, the task is relatively complex and fraught with pitfalls. Name changes, flag changes and insurance policies make it difficult to take decisive action against these vessels. On the other hand, preventing Russia from exporting its crude oil could lead to a significant increase in the price of oil. Therefore, US and G-7 politicians are carefully and slowly weighing the costs and benefits of taking strong measures against these vessels.

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