Photo taken on 11 October: Oil tanker off the Russian port city of Novorossiysk © Vitaly Timkiv/Imago
New research suggests that Russian tankers are falsifying position signals to evade Western sanctions. One expert speaks of a "sophisticated deception".
Moscow – Since Russia's invasion of Ukraine last year, the West has relied on sanctions to thwart Russian President Vladimir Putin. In addition, a price cap on Russian oil – an important source of income for Putin – has been in place for several months. The hope is that in this way the Russian dictator will slowly cut off the money supply for his war. But Russia is apparently circumventing the requirements with a new tactic.
Oil price cap: Russia builds shadow fleet
At the heart of this is a shadow fleet of oil tankers that are supposed to continue selling Russian oil – for example in China or India. But there is a catch for Russia: because the lever of the West's oil price cap works through its market power in shipping services. Companies from G7 and EU countries as well as Australia are only allowed to provide services related to the shipping of Russian oil if the price cap is complied with when selling the oil.
Currently, companies from G7 countries provide around 90 percent of the world's transport insurance, which is so important for oil trading. Without this insurance cover, you can't really get far in the transport business legally – Russian oil tankers also continue to rely on Western insurance.
Are Russian tankers falsifying position data to evade sanctions?
Now, a new investigation by the renowned US newspaper New York Times (NYT) suggests that the tankers falsify their position data in order to avoid sanctions and at the same time retain insurance coverage. Where ships are is actually easy to find out via position signals. But according to the NYT, the tankers transporting Russian oil stand around in neutral sea zones in Asia for a conspicuously long time. Sometimes they seem to drive in circles again and again without a destination.
According to the NYT, this happens because the signals are faked using software. For example, the journalists were able to see on satellite images that at the same time the ships were actually somewhere completely different from what was indicated by the position signals, for example in a Russian port, apparently to load oil and transport it to China – and very likely to sell it outside the price cap, according to the NYT.
Expert: "A new kind of shipping market is emerging"
"This kind of deception that we're seeing is unusual and sophisticated," David Tannenbaum, a former sanctions enforcement officer at the U.S. Treasury Department, told the NYT about the tankers' behavior. This definitely looks like a circumvention tactic. In this case, the Western insurer would have to immediately suspend the protection without notice. The newspaper also asked a U.S. insurance company to insure several of these tankers. However, the latter did not want to comment on this for legal reasons.
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Experts also expected the spread of a parallel market even before the oil price cap came into force: "A new kind of shipping market is emerging, parallel to the normal, compliant market in which most of us operate," Lars Barstad, CEO of the tank owner Frontline, told the Wall Street Journal at the time.
