- Tens of millions of barrels of Russian oil switched off Greece.
- Cargo switching activity taking place in international waters.
- The penalty for non-compliance is light, offering a limited disincentive for owners and companies to not help move Russian cargoes.
Millions of barrels of Russian crude and fuels have been switched between tankers just a few miles off the coast of Greece, one of a series of workarounds that traders have used to overcome European Union sanctions against Moscow.
Russian oil supply chain
At least 23 million barrels of Russian crude and additional volumes of refined fuels have been transferred from one tanker to another in the Bay of Lakonikos since the start of this year, according to tanker tracking by Bloomberg.
Greek authorities say their scope to intervene is limited because the activity is happening outside of a six-mile limit to the country’s territorial waters in the area.
Traders and shipping companies have found a multitude of ways to ensure Russian oil can flow and this is just the latest example.
Helping russia overcome sanctions
There has been similar activity near Ceuta, a Spanish enclave in north Africa. A vast shadow fleet of tankers has also sprung up to help the country overcome sanctions.
The cargo switching at sea — known by traders as ship-to-ship, or STS, transfer — requires several key services in order to take place safely.
European Union firms are only allowed to provide those services if the cargo on board is purchased at or below a Group of Seven price cap. The government wasn’t immediately available to comment on what checks it makes.
Once the cargoes are switched, the receiving tankers will then ferry the oil thousands of miles to buyers in Asia.
Greece is the world’s top oil-tanker owning nation and when the EU was negotiating a cap on Russian oil prices, the country was among those pushing for higher thresholds.
The country was also among those pushing for weaker restrictions on transporting Russian oil when the relevant measures were being discussed.
Average age of the tankers involved
Many of the vessels involved are old and their insurance status is unclear. The average age of the tankers involved in the crude transfers off Greece is 18 years.
The oldest involved was built in 1997. That compares with a wider tanker fleet whose average age is about 12 years for the size of vessel most commonly used for hauling Russian crude.
Ship-to-ship transfers are not inherently risky, but they do involve two vessels floating about in the sea pumping potentially polluting cargo from one to the other.
The bay is home to a sea-turtle protection project while a nearby estuary provides feeding and breeding grounds for birds.
Spanish Example
Earlier this year, after it emerged that ship-to-ship activity was happening near Ceuta, Spanish authorities sent a letter to local shipping services firms reminding them of the prohibition on providing fenders for STS if that involved Russian oil, or the suspicion of Russian oil, even in international waters. The main opposition party called on the government to clamp down on the activity.
The EU’s rules state that companies should carry out due diligence, as well as check and collect the attestations proving that oil cargoes are purchased under the price cap. Authorities should also carry out checks and controls on companies.
Typical services for the activity include providing fenders to avoid damage to ether vessel or environment, cargo masters, and sometimes specialist pilots.
Still, the penalty for non-compliance is light, offering a limited disincentive for owners and companies to not help move Russian cargoes.
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Source: Bloomberg
