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Tankers Tied to the Russian Oil Trade Grind to a Halt Following US Sanctions
A chunk of the vast fleet of tankers that Russia uses to deliver its crude oil is grinding to a halt under the weight of US sanctions, a sign that tougher measures by western regulators might be starting to have tangible effects on Moscow
About half of the 50 tankers that the US Treasury began sanctioning on Oct. 10 have failed to load cargoes since they were listed, according to a ship-by-ship tracking of each one by Bloomberg. The latest to be targeted — the Sovcomflot carrier NS Leader — performed an immediate U-turn off the coast of Portugal on Thursday when its owner was named by the US. It was sailing toward a Russian port in the Baltic Sea at the time.
The Group of Seven imposed a $60-a-barrel price cap on crude in December 2022 that was meant to keep Russian oil gushing while at the same time depriving the Kremlin of petrodollars. Caps on refined products were introduced two months later. The system came in for heavy criticism last year as Moscow found workarounds and some western companies continued moving the nation’s oil — something they weren’t supposed to do once the barrels traded above the threshold.
But the US responded by intensifying sanctions and investigating potential breaches of the price cap, a step that drove many Greek tanker owners out of the trade.
The result has been ballooning freight costs and Russian oil that’s being trading at deeper discounts to international benchmarks, according to organizations including the International Energy Agency. Russian energy minister Alexander Novak said that the country’s barrels are going cheaper.
The picture is still fragmented because the US Treasury imposed its sanctions in batches, meaning that some ships might not have gotten to the point of loading cargoes yet anyway.
Of the 50 tankers sanctioned since early October, 18 have collected cargoes. Of those, nine were shuttle ships and nine appeared to collect consignments as normal since they were added to the list. One is still carrying a cargo it took on board before it was sanctioned.
That leaves 31. Of those, seven had been idled even before sanctions and three may well load soon. That leaves 21 that haven’t loaded cargo since.
Sanctioned Ships
Eight individual vessels were named between Oct. 10 and Dec. 12. Another 24 tankers were then listed on Dec. 20, when the Treasury took measures against SUN Ship Management D Ltd., a company owned by Russia’s state-controlled shipping company Sovcomflot PJSC. Hennesea Holdings Ltd., a United Arab Emirates-based owner of 18 vessels was added to the sanctions list on Jan. 18. The 50th vessel, the NS Leader, was named on Thursday.
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