Amid escalating tensions and Western sanctions, covert sea transfers of Russian oil have surged, raising concerns about trade transparency and safety in the maritime industry. The Spglobal source.
- Covert transfers of Russian oil at sea tripled in Q2, evading EU sanctions and G7 price caps.
- Motivated by secrecy, Russia seeks to obscure trade flows, complicating Western sanctions enforcement.
- Safety concerns rise as older tankers engage in clandestine operations; international regulations and EU measures aim to address these challenges.
Opaque Transfers Surge
In the second quarter of 2023, covert sea transfers of Russian oil witnessed a significant spike, tripling previous numbers. This trend is seen as Russia’s response to EU embargoes and G7’s oil price caps.
Motives Behind Secrecy
Experts suggest Russia’s motive is to conceal its trade flows, making it difficult for Western countries to gauge its commercial activities. The West relies on understanding Russia’s trade dependencies to design effective sanctions.
Impact on Trade
While Russian oil is generally sold below price caps, labeling it as originating from elsewhere eases commercial transactions. This practice extends beyond ship managers and charterers to financial services and commodity brokers.
Safety Concerns and Regulatory Measures
The age of tankers involved in clandestine transfers in Russia’s Exclusive Economic Zone (EEZ) is on the rise, raising safety concerns. International organizations are calling for tighter enforcement of regulations to address these risky operations. The EU has also implemented measures to counteract these activities.
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Source-spglobal
