As of: January 23, 2024, 8:31 a.m
By: Christiane Kühl
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Tanker at the crude oil terminal at the port of Yantai: Russia has become China's largest oil supplier.
However, the oil is often transported on so-called “shadow tankers” © Li An/Xinhua/Imago
Russia sold more crude oil to China in 2023 than any other country in the world.
Due to the G7 oil price cap, a growing number of unregistered “shadow tankers” are responsible for transport.
On an early winter morning in 2023, about 40 nautical miles east of the northern tip of Morocco, two old oil tankers drifted alongside, tied alongside heavy ropes.
The two ships, named
Amber 6
and
Catalina 7
, took advantage of the weak wind to transship crude oil from Russia on the high seas.
730,000 barrels of oil flowed from the
Amber 6
through pipes into the
Catalina 7
over 30 hours.
After the
Catalina 7
picked up the last drop of oil from the
Amber 6
, the two tankers separated - and the
Catalina 7
headed for China, where it arrived about two months later.
Amber 6
had previously picked up the oil in the Russian Baltic Sea port of Ust-Luga.
Russia became China's largest oil supplier in 2023.
According to Chinese customs data, Moscow delivered a record 107 million tons of crude oil to the People's Republic last year.
China's imports from its previous top supplier Saudi Arabia, however, fell by 1.8 percent to 86 million tons in 2023.
China imports Russian oil through intermediaries
China is taking advantage of the low prices of Russian oil, which Moscow has to accept due to Western sanctions and import bans from previous customers.
Before the Ukraine war, Europe had bought more than half of Russia's crude oil.
Europe now buys practically nothing at all.
The G7 countries and the EU have also imposed a price cap of $60 per barrel on Russian oil in order to limit Russia's oil revenues.
Ships from the signatory countries are no longer allowed to transport Russian crude oil if it was traded at a price of over 60 US dollars per barrel.
Insurance or financing of the cargo is also prohibited if the price is above the price cap.
Since 95 percent of all ship insurance is transacted via London, the ban on services is quite effective: every ship needs insurance cover.
So there are hardly any reputable shipping companies or reputable oil traders that handle Russian oil anymore.
Oil price brake: Growing fleet of unregistered shadow tankers
Instead, since 2022, oil traders have observed the purchase of hundreds of old tankers by obscure or unnamed buyers.
And so an ever-growing fleet of unregistered, ancient tankers sails the world's oceans to transport Russian oil to those who still want it.
In addition to China, this includes India, whose imports of Russian oil have exploded since the beginning of the war.
Russia's Deputy Prime Minister Alexander Nowak announced in December that virtually all of Russia's crude oil exports in 2023 would go to China and India.
The US economic service
Bloomberg
has traced the journey of the tankers
Amber 6
and
Catalina 7
as an example of the problem, using satellite tracking systems and months of research with statisticians, traders and officials.
The research provides insight into a network of new and often faceless middlemen and ship owners operating from locations such as Dubai and Hong Kong.
Russian shipping companies also buy discarded tankers - including from Greece, whose shipowners make good money from them.
A move by the EU at the end of 2023 to ban such tanker sales failed due to a lack of unity.
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Shadow tankers carrying Russian oil: security risks and antidotes
The United Nations' International Maritime Organization (IMO) described transshipment of oil on the high seas using older ships as a "dangerous practice."
Many of the shadow tankers are so old that in normal times they would have long since been decommissioned.
A warning signal is an incident in August 2023, when the tanker Yannis P.
full of Russian oil had to anchor off the Baltic Sea island of Rügen for two weeks
.
The ship was on its way to India, but an engine failure stopped the journey.
Since Russian oil was not allowed to be unloaded in the EU, ocean-going tugs had to take the tanker to the sea area in front of the Russian Baltic Sea port of Kaliningrad so that the oil could be pumped to another tanker there.
Yannis P.
has been repaired and is currently on the journey from Russia to India.
Europe at risk for shadow tanker accidents
Yannis P.
's worries about an oil leak remained unfounded
.
“But if there is an accident, it is more likely to happen in European waters than anywhere else,” Brian Gallagher, head of investor relations at Euronav NV, the world’s third-largest owner of supertankers, told
Bloomberg
.
Ship-to-ship transfers “intentionally do not take place in well-monitored waters”.
In addition to the northern tip of Morocco, Russian oil is also transshipped in Europe, for example near Malta or in a bay near southern Greece.
However, according to Bloomberg
, there have recently been
signs that the shadow fleet is running into problems as a result of tightening US sanctions against oil trade with Moscow.
In the last few weeks, 14 tankers from different countries that transport Russian oil to India have turned around or exhibited the devices for digital positioning systems.
Others are languishing in place.
It is uncertain whether they will still head to their destination ports.
The problem could also affect China transport, but so far it is only an initial observation.