Status: 17/09/2023, 20:42 p.m.
By: Foreign Policy
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A Suezmax tanker. (Symbolic image) © Imago
The world's largest ship-owning nation benefits from the sale of obsolete ships while allowing Moscow to circumvent sanctions.
- Ships for Russia: Greek shipowners sell tankers
- Mysterious buyers: names of customers are unknown
- Secrecy in Greece: Tanker sales to Russia are concealed
- This article is available in German for the first time – it was first published by Foreign Policy magazine on September 11, 2023.
Since Russia's invasion of Ukraine, Greece's powerful shipping sector has continued to make good money transporting Russian oil. But the Greek shipowners have discovered an apparently even more lucrative source of income: the sale of the ships themselves to mysterious buyers with ties to Russia. A publication has stated that a "big Greek tanker sale" is taking place, and no price seems too high for a used tanker. But the former Greek ships fall into a Hades-like shadow economy.
Greek companies may not dominate many sectors of the globalized economy, but they certainly dominate shipping. Last year, the country was once again the largest shipowner in the world in terms of the carrying capacity of ships. Then Russia invaded Ukraine, and Western governments tightened their sanctions. The Greek shipowners did not like this. "Sanctions have never worked," Greek shipping magnate George Prokopiou said at a maritime event last June.
Sanctions against Russia: what are the consequences of price caps
But sanctions are more effective than doing nothing, and last December, the G-7 countries, the European Union and Australia introduced a price cap that prohibited companies based in the sanctioning countries from trading Russian crude at prices above $60 a barrel or shipping it by sea. Demand for the oil remained high, but Russian-owned tankers, which carried much of the oil, were hit by the sanctions and struggled to transport it. Greece's shipowners came to the rescue.
According to the chief economist of the Institute of International Finance, Robin Brooks, Greek ships currently account for almost 50 percent of tanker capacity from Russian ports, up from 33 percent before the invasion. Companies based in countries that have introduced price caps on Russian oil are allowed to ship oil if the price is below the cap. In the ports of the Baltic and Black Seas, which are important for Russia, seven Greek companies together shipped 50 percent more Russian oil than Russia's state-owned Sovcomflot, the Wall Street Journal reports.
Profit from the Ukraine war: Greek shipowners sell tankers to Russia
But now many Greek shipowners have decided that they can profit even more by selling the ships. Sales began to skyrocket in February 2022, and there is a "demand for tankers, for older tankers around the world, especially in countries that are not burdened by sanctions against Russia," TradeWinds explained. In the 12 months since, Greek owners have sold about 125 crude oil and ship tankers worth $4 billion. In June, Hellenic Shipping News reported that Greek companies have sold 97 tankers so far this year, accounting for 25 percent of the global total.
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My Area
This puts Greece in the lead, followed by China in second place. According to figures provided exclusively to me by the consulting firm VesselsValue, which tracks ship sales, Greek companies have sold 290 ships since the beginning of the war. Chinese companies are in second place with 221 ships. Russian companies have sold 57 ships, but mostly to other Russian companies or unknown buyers.
In 2022, the number of Suezmax tankers that changed hands doubled compared to 2021 to 103, while sales of Aframax vessels increased by 30 percent to 121. (Suezmax and Aframax tankers are the third and fourth largest types of crude oil tankers, respectively.) These types of vessels are "the preferred vessel size for transporting Russian cargoes," a shipping industry executive told S&P Global Commodities Insight, because "not all ports in Russia can accommodate larger vessels."
Alleged ship sales to Russia: names of buyers are unknown
Post-invasion sales include the Aframax tanker Seatrust, which Greek company Thenamaris sold for $35 million — more than three times what Thenamaris paid for it eight years earlier. Cyclades Maritime, another Greek company, sold a VLCC (Very Large Crude Carrier, a size above the Suezmax) for $62 million – almost double the $38 million it paid for it. Another Greek company has sold its four oldest crude oil tankers for a total of $140 million, prompting a shipping industry executive to remark that "there has never been a tanker market like this before."
Despite the good news for the sellers, the names of the generous buyers were mostly not disclosed. The buyers who are now rushing to pay a markup for used tankers are indeed decidedly mysterious. Companies based in the United Arab Emirates (UAE) have bought the most Greek tankers, followed by buyers in China, Turkey and India. S&P Global Market Intelligence reports that in 2022, a staggering 864 shipping companies with a connection to Russia were established. My research assistant, Katherine Camberg, has tracked down more than two dozen formerly Greek-owned ships whose new owners are often so opaque that they don't even have a mailing address.
Although the United Arab Emirates is not known as a global center of seafaring, the main role it plays in tanker purchases is not surprising. Since Russia's invasion of Ukraine, Dubai has established itself as "the new Geneva" – in other words, the capital for companies trading in Russian oil. China has increased its Russian oil imports since the invasion, and Hong Kong has established itself as a new oil trading hub alongside the UAE. Turkey has also increased its imports of Russian oil, and one of the well-known buyers of the Greek tankers is Turkey's BEKS Ship Management & Trading. Their recently acquired former Greek tankers have been seen on the website MarineTraffic.com in recent weeks calling at and leaving ports such as Vysotsk, Kavkaz and Novorossiysk in Russia, Artsev in Algeria and Tuzla in Turkey.
About the author
Elisabeth Braw is a columnist at Foreign Policy and a fellow at the American Enterprise Institute, where she focuses on defending against emerging national security challenges such as hybrid and grey area threats. She is also a member of the UK's National Preparedness Commission. Twitter (X): @elisabethbraw
Sanctions due to the Ukraine war: Tanker sales to Russia are concealed
India has also massively increased its imports of Russian oil, and the country is home to Gatik Ship Management, one of the suddenly active companies that are now doing massive business with Russian oil. Last year, the company purchased five Suezmax vessels and 16 Aframax vessels, as well as several smaller refined fuel tankers and a VLCC. In total, Gatik has acquired 60 ships since the start of the war, including a Suezmax for $42 million, an Aframax for $39.5 million, and $30 million each for at least 19 other ships, according to VesselsValue's figures. But since late spring, Gatik has transferred its tankers to "a network of affiliated companies," as the Indian Express reported last month — "an attempt by Gatik's patrons to make it harder to track the entire operation and keep activities opaque." Camberg traced the trail of some ships to new owners whose only footprint is a name, if any.
In fact, obfuscation seems to be the goal. As Russia gradually leaves the formal global economy, which means losing access to services ranging from capital to insurance, transporting its lucrative oil is not as easy as it used to be. The formerly Greek tankers join the opaque fleet of second-hand ships, which are already transporting goods to and from Russia under unclear insurance conditions and often with evasive maneuvers to avoid detection.
Mysterious ship sales to customers in Russia: problems are inevitable
What happens if one of these tankers has a leak? Or if it collides with another ship? Or if crew members are injured? This is inevitable. In May, an older shadow fleet oil tanker caught fire off the coast of Malaysia, injuring some crew members and missing three. The tanker belonged to a company in the Marshall Islands that does not own any other tankers and was not insured. And last month, a sailor disappeared from a shadow fleet tanker transporting Russian oil to India. No one took responsibility for his salvage.
Greek shipowners could have made their contribution to peace in Ukraine by restricting Russian oil exports. Instead, they have made good money from oil - and now also from the sale of ships. This is not illegal, but the moguls put sailors, seas and marine wildlife at risk, not to mention Ukraine. It is a Greek tragedy.
We are currently testing machine translations. This article has been automatically translated from English into German.
This article was first published in English in the magazine "ForeignPolicy.com" on September 11, 2023 - in the course of a cooperation, it is now also available in translation to the readers of IPPEN. MEDIA portals.
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