The Russian Shadow Fleet is experiencing a lull
The United States has taken fresh measures against Russia's oil exports, targeting its so-called ghost fleet. Last week, the U.S. government announced additional sanctions, including those against Russian oil producers Gazprom Neft and Surgutneftegaz, and 183 vessels involved in transporting Russian oil. According to Reuters, citing data from MarineTraffic and LSEG, about 65 of these oil tankers have halted their journeys and are currently anchored at various locations worldwide.
Five of these vessels are now off the Chinese coast, seven off Singapore, and others in the Baltic Sea and off the Russian Pacific coast. The new sanctions have prompted port operators to deny docking permissions to affected ships due to potential fines from the U.S. Some ports had already started banning dockings for sanctioned tankers, as reported by Reuters, citing oil traders.
Russia has circumvented Western sanctions, which restrict insurers from covering certain oil deliveries, by utilizing the ghost fleet. These uninsured ships have been a loophole for Russia in its large-scale oil exports evasion. The new U.S. sanctions aim to close this gap in the measures targeting Russia's export revenues.
In this context, the Transportation Ministry of Russia reported that the latest U.S. sanctions on their oil-tanker fleet would impede around 10% of the global oil tanker fleet, as per Reuters. The increased capital needs due to sanctions have pushed charter prices, with the rise being as high as 10% on Monday.
The new sanctions from the outgoing U.S. administration further impact Russia in its most economically sensitive area – oil exports. The pipeline-bound oil exports to Western customers had almost halted post the 2022 Ukraine attack, making seaborne sales, particularly to India and China, crucial for Russia.
The U.S., EU, and other Western governments initially refrained from imposing sanctions on this export route to avoid disrupting the global oil market. Later, a price cap was introduced, but it had only limited impact. With the new U.S. sanctions, Russia now faces logistical challenges in securing non-sanctioned tankers.
Reference(s):1. "Russian oil exports face U.S. pressure as new sanctions hit ships, insurers" by Reuters.2. "U.S. sanctions target Russia's oil exports, but not its resilience" by Washington Post.3. "Russian oil production comeback faces hurdles as sanctions hit fleet" by Reuters.4. "Russia's Oil Export Game of Cat and Mouse" by Atlantic Council.5. "Will U.S. Sanctions Derail Russia's Oil Export Machine?" by Oilprice.com.
The new sanctions are causing significant disruptions to the global oil tanker fleet, affecting approximately 10% of it according to Russian authorities. The economy of Russia, heavily reliant on oil exports, is facing logistical challenges due to the U.S. sanctions, particularly in securing non-sanctioned tankers for seaborne sales.
