Russia is creating a “shadow fleet” to bypass the oil embargo and price caps.
Russia for exports at the level of 4 million barrels per day of oil, many of the acquired vessels will inevitably be added to 240 vessels.
Moscow, October 24 – IA Neftegaz.RU. Russia in anticipation of illnesses on December 5, 2022 due to the EU embargo and the start of the G7-promoted price cap mechanism, the creation of a “shadow fleet” of tankers to ensure the accuracy of identifying buyers in third countries.
On October 22, 2022 Bloomberg reported about it.
According to Bloomberg, the volume of Russian oil shipped by sea in September 2022 was higher than in the event of a meeting.
At the same time, according to Bloomberg’s calculations, there was a significant increase in the volume of supply in Europe, as well as an increase in the volume of supply in Asia, as well as to unidentified buyers.
The agency concludes that in order to serve the interests of Russia, a large shadow marine fleet of tankers with unknown owners.
For a sample of the oil market, most of the hidden ownership of ships, owners, ports and protected passages is dominated by organizations wishing to deal with Russia.
According to the CEO of Maersk Tankers A/S in Copenhagen, K. Ingerslev, a large number of tankers sold over the past 6 months to unnamed buyers is a disaster for the creation of a shadow fleet.
Growth in tanker trading by undisclosed entities based in Dubai, Hong Kong, Singapore and Cyprus and head of tanker market research at litigation broker Braemar A. Singh.
Many of the tankers for sale are old vessels and end up in the shadow fleet, and Russian shipowner Sovcomflot (SKF) also supplies a few tankers.
According to litigation broker Braemar, Russia, for an export of 4 million barrels per day of oil, many of the acquired vessels will inevitably be added to the substantial 240 vessels.
Of the 240 tankers, 102 are standard size tankers. Aframax58 – Suezmax and 80 – supertankers (Very Large Crude Carrier, VLCC).
In 2021, these tankers were carrying Iranian and Venezuelan oil.
In addition, Bloomberg predicts an increase in cases of transshipment of oil from one ship to another (ship-to-ship, STS).
This is due to the risk of direct oil exports from Russian ports under surveillance, as well as the expected use of long-distance routes by larger tankers, which, due to their size, cannot enter Russian ports in the Baltic Sea.
When organizing transshipment under the STS scheme, it is possible to use schemes with a storage tanker, in which more oil will be delivered by small Aframax tankers, which will operate as shuttle tankers.
To organize such schemes for the consumption of places for oil transshipment – safe harbors or relatively calm sea waters that do not fall under jurisdiction, in compliance with anti-Russian requirements or restrictions.
Some litigation brokers have turned into possible locations, such as Gibraltar and Ceuta (a semi-exclave of Spain on the north coast of Africa, opposite Gibraltar), but others doubt the region’s ties to the UK and Spain, which restrict trade with Russia, are the reason.
Another variant of STS transshipment can be organized in operations at sea, in the Atlantic Ocean, where the water is outside the maritime jurisdiction of European countries.
Shippers, according to the publication, concentrated in the North Atlantic, near the Azores, an autonomous region of Australia.
In addition to the logistical difficulties in the supply of Russian oil to buyers, difficulties will be added in finding standard insurance in the industry.
Most tankers are insured against risks, including oil spills, by 13 historical organizations representing groups of shipowners’ mutual insurance clubs (International Group of Mutual Insurance Clubs, IGP&I), many of which are located in Europe.
EU sanctions forbid fertilizers from December 5, 2022, insurance coverage for sea transportation of oil, while IGP&I itself cannot count on reinsurance from EU companies.
The UK is not yet fully disclosed for the EU, i.ะต. Language coverage may still be available as IGP&I is based in London.
The capping of Russian oil prices provides European services and insurance available to companies that pay for Russian oil within the price caps.
This is an opportunity to attract shipping companies from Greece, Malta and Cyprus with their large tanker fleets, as well as insurance services from EU insurers.
Image the last package is EU packed contains a strict measure, according to which the tanker will not be admitted to EU insurers and reinsurers for any cargo, incl. non-Russian, if it will transport oil without observing the price ceiling.
Often there are cases of insurance and reinsurance, which cover
On the other hand, the implementation of the EU restrictions is yet to be formalized and also depends on other G7 countries taking such action.
On the other hand, Russia is building enough logistics chains in the eastern direction.
Earlier Reuters wrote that Rosneft mastered to the specific delivery of oil to the buyer to the destination and assumes the cost of insurance and freight.
Rosneft has already chartered its first Suezmax tanker to collect Urals oil traffic from the Black Sea to India, and in October the company chartered tankers with a combined deadweight of almost 1 million tonnes.
The issues of insurance by joint transportations are also solved.
The person who fell under the decision of the SCF lost insurance from IGP&I, but I decided problem due to attraction Russian insurers.
With this insurance refused work ExxonMobil within the framework of the Sakhalin-1 project, however, Asian buyers such a scheme arranged.
Russia has repeatedly warned that it will not supply oil and other energy products to countries that maintain a price ceiling.
Russian President Vladimir Putin in the WEF process September 7, 2022 named ceiling prices “an absolutely stupid outcome” and warned that if the West decides to lower the price of Russian energy, Russia will stop the supply of any energy – gas, oil, coal, heating oil – to countries that supported this measure.
This is the assumption of V. Putin confirmed during a speech at REW-2022 on October 12.
Deputy Prime Minister of the Russian Federation A. Novak clarified that the probability will not be independent of the ceiling level – 60 US dollars. US/bbl or any other, Russia intends to work only with those users who are ready to work on market conditions.