Western sanctions fail to stop vessels transporting Moscow oil, Bloomberg reports

Almost a third of Russian vessels from the black list have returned to operation.

Source: Bloomberg 

Moscow’s use of tankers, which are sanctioned for participating in the trade of Russian oil, is accelerating.

At least 21 out of 72 tankers that were sanctioned by the US Treasury Department’s Office of Foreign Assets Control, the UK Treasury or the European Union in 2023 have made a total of 24 shipments of Russian oil.

A combination of increased buyer confidence and, in particular, a lack of concern regarding measures imposed by London has likely helped Moscow and its clients find workarounds. 

The rate of tankers returning to operation is rising: at least seven tankers accepted cargoes in the first ten days of October, compared to six tankers per month in August and September and just five tankers total in the four months before that.

Initially, the tankers on the black list remained idle. None of the sanctioned vessels transported any cargo of Russian or any other oil until April – six months after the first sanctioned vessels were named. After those initial shipments were successfully delivered, the use of sanctioned tankers sharply increased.

It is noted that two-thirds of all vessels that were under UK sanctions have returned to operation. At the same time, only six shipments were transported on 4 of the 39 tankers that were blacklisted by Washington. 

Additionally, 50 vessels have been renamed since sanctions were imposed, many of which simultaneously changed flags. 

Most crude oil shipments were directed to Chinese ports, but about a third of them ended up in India – an indication that the country’s previous reluctance to engage with sanctioned entities has remained in the past.

Background:

• The Indian government has admitted that it purchases Russian oil without any doubts, since it is not under sanctions.
• The Russian government expects a decline in oil and gas revenues over the next three years due to falling energy prices and a softer tax regime for the Russian energy giant Gazprom.

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