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- Tanker switching for Russian oil hits record high as sanctions kick in
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2023 March 13
Tanker switching for Russian oil hits record high as sanctions kick in
Seaborne tanker switching of Russian-origin crude and products have rebounded to record highs since the latest round of Western curbs on Moscow's oil, according to tanker tracking data, with the transfers increasingly focused in waters off Greece and Spain's north African enclave Ceuta.
But the shipping data suggests the opaque practice of ship-to-ship transfers may be less aimed at sidestepping US and EU sanctions by refiners and traders and more linked to Russia's increasing need to market its discounted oil to a shrinking pool of interested buyers.
At least 22 million barrels of Russian crude and diesel—the country's main oil product export—were rerouted through STS transfers in February, a 3.8-million-barrel increase from January and the highest in recent history, according to S&P Global Commodities at Sea data.
Transfers off the port of Kalamata, Greece, jumped 60% on month to 9.37 million barrels accounting for almost half of all Russian STS crude activity. Although lower than January levels, STS transfers of Russian crude of Cueta made up another 4.4 million, putting the European STS sites at 71% of the global total.
Yosu, on the southern coast of South Korea, saw some 5.8 million barrels transferred offshore in February, taking the total crude transfers to a record 19.5 million barrels that month, the data shows.
The rise in STS transfers coincides with the EU's sanctions on seaborne Russian crude imports, as well as a ban on bloc-based firms providing maritime services to any non-EU vessels transporting Russian oil in breach of the oil price cap, which is Dec. 5 for crude and Feb. 5 for oil products. Brussels has also banned Russia-flagged ships from entering EU ports.
Although a common and not necessarily illicit part of the maritime oil trade, STS activity has been part of the sanctions-dodging playbook for Iran and Venezuela for years as a way of concealing the final destination of oil cargos.
But an S&P Global Commodity Insights analysis of the recent Russian oil transfers shows that the vessels receiving the oil are mostly taking the cargoes to India, China, Singapore, and Malaysia rather than to any banned European destinations. Shipments of Russian oil to Asia have already rocketed as Moscow seeks to sell its discounted crude displaced from Europe.
Although Russia has said it will not sell oil to parties operating under the terms of the price cap, Moscow is likely to turn a blind eye to STS activity in the region, head of research at shipping firm Braemar Henry Curra said March 6, with Greek-dominated tanker owners moving a lot of Russian crude and products.
Platts, part of S&P Global, assessed Urals on a FOB Primorsk basis at $45.885/b March 7, well below the G7's $60/b price cap, and Dated Brent at $84.005/b.
"Russia is utilizing the Mediterranean and waters near Yosu, South Korea, as a key pivot point for Urals and Sokol crudes in order to sustain profitability by using smaller tankers to facilitate STS transfers onwards to Asia," said Mark Esposito, principal research analyst at S&P Global. "Simultaneously, India and China continue to capitalize on the deeply discounted crude as the market has shrunk to two primary players.
Nevertheless, some shippers may be keen to avoid the higher insurance costs for tankers carrying Russian oil—even legally under the G7 price cap—if they can conceal the origin of their cargoes.
With EU sanctions and G7 price cap curbs shrinking the appetite for dealing with Russian oil among mainstream shipowners, Moscow is now keener than ever to find buyers for oil even at sea. Russian oil on water has surged by 23 million barrels since the start of the year, CAS data shows, surpassing 94 million barrels as of March 2.
Spot rates for crude tankers out of Russia soared in the early days of the Ukraine..., before plunging and then climbing more steadily. Platts assessed Dirty Baltic-med 100,000 at a record-high $98.75/mt April 13 before falling back to $18.17/mt May 17. Since then, it has climbed to be assessed at $62.53/mt March 7.
Record offshore cargo switching can also be seen in Russian diesel, the country's biggest single oil product export.
Transshipments of Russian gasoil and diesel jumped by 1 million barrels to 2.54 million barrels in February, the data shows, with all the trade off Spain and Greece. Over 70% of the rerouted diesel (1.8 million barrels) was discharged near Kalamata, while another 684,555 barrels were transferred near Ceuta.
The rising tide of STS transfer in European waters has already caught the attention of EU regulators.
Last month, the European Commission sanctioned Sun Ship Management, a Dubai-based shipping company that is a subsidiary of Russian state shipping company Sovcomflot. In April 2022, Sovcomflot transferred the management of 92 of its tankers and LNG carriers to Sun Ship Management and Sun Ship has been operating as "one of the key companies managing and operating the maritime transport of Russian oil," the EU said, adding its suspects Sun Ship of helping Russia circumvent sanctions on oil exports.
"Dubai has become a hotbed for companies controlling shadow tankers and the sanctioning of Sun Ship Management would undoubtedly create more hurdles for Russia moving its barrels," BRS Shipping said in a recent tanker report.
Spain has also sought to clamp down on shipping service providers assisting any STS activity involving Russian STS oil transfer off Cueta.
Shipowners also tend to prefer vintage tankers with lower values for sanctioned trade, which do not have age requirements, according to analysts. The CAS data shows that the average age of crude tankers involved in STS transfers was 16 years in January and February, compared to around 12 years for the wider crude tanker fleet.
17 марта 2023
Одна из главных проблем для российской внешней торговли - это сложности со страхованием судов, вызванные санкциями. Несмотря на отказ западных страховых компаний работать с Россией, существует ряд альтернатив, однако все они имеют свои недостатки. Страшное страхование