The Price Cap Coalition maintained by the G7, the European Union, Australia, and New Zealand has issued an update to its policies regarding Russian oil, with a specific warning for brokers.
The document, published yesterday, states: “A ‘shadow’ trade has become more pronounced, often involving actors and cargo affiliated with countries and/or persons subject to sanctions, or associated with other illicit activity. This shadow trade is characterized by irregular and often high-risk shipping practices that generate significant concerns for both the public and private sectors.”
As well as previously telegraphed calls to ensure ships are suitably insured, flagged and classed, the guidelines carried advice for brokers.
“Those involved in the sale and brokering of tankers should remain vigilant of potential evasive or illicit purchase structures and end-uses, especially for ageing tankers, including tankers previously designated for recycling,” the guidelines state, urging greater due diligence when carrying out tanker sales.
British marine service providers are coming under greater scrutiny for their dealings with Russian oil, with major reports carried out earlier this month by both the Financial Times and the BBC.
On October 10, the Financial Times published the detailed results of a five-month investigation into Russia’s dark fleet in which London-listed Braemar was accused of helping broker a number of tankers to move Russian oil.
“For every transaction that Braemar considers undertaking, it conducts all appropriate due diligence with know-your-customer checks, legal, compliance and regulatory adherence,” Braemar told the Financial Times.
The BBC, the UK’s public broadcaster, reported that the government is investigating 37 UK-linked businesses, including a number of marine insurers, for potentially breaking Russian oil sanctions.
The crude oil price cap, which came into effect on 5 December 2022, was implemented by the EU, G7 and Australia, restricting the use of Western shipping services if prices for Russian oil exceed a certain price cap, currently set at $60 per barrel of crude oil. A similar cap for Russian products came into effect two months later.
With the 1,000th day anniversary of the start of the full-scale invasion of Ukraine fast approaching, finally, there appears to be far greater collaborative efforts among Western nations to crack down on the shadow fleet.
For instance, the UK last week started what could be the beginning of a greater Europe-wide scrutiny of Russia’s dark fleet. while in Asia. one of Moscow’s top oil clients, India, has also come out with new guidance, taking aim at substandard tonnage.
The UK’s Department for Transport is working alongside the Joint Maritime Security Centre (JMSC) and the Maritime and Coastguard Agency (MCA) to challenge shadow fleet vessels with what the government described as “suspected dubious insurance” to provide details of their insurance status as they pass through the English Channel. Failure to provide approved insurance could result in ships being detained, the government stated yesterday.
At the European Political Community Summit in July, Keir Starmer, the British prime minister, announced what was described as a shadow fleet call to action. Last week, the US and Canada said they had joined 44 European countries in this collaborative effort to tackle the risks posed by the shadow fleet.
The call to action urges all member states of the International Maritime Organization (IMO) to prevent illegal operations in the maritime sector by the shadow fleet.
Signatories to the movement have called on flag states to ensure that ships flying their flag adhere to the highest possible safety and pollution prevention requirements and best practices while port states are asked to ensure the enforcement of the safety and liability conventions on these ships, including those that relate to ship-to-ship transfer operations and the requirement to have on board valid state certificates of insurance.
Signatories have agreed to share information on the practices and operations of the shadow fleet to coordinate responses to the risks posed by its ships and facilitators and to work with the private sector and other maritime stakeholders to address the threat.
In related shadow tanker insurance news, the directorate general of shipping in India, a top buyer of Russian oil, is putting in place new guidelines to ensure all ships calling at the world’s most populous nation have the correct protection and indemnity (P&I) insurance certificates in place.
In the western hemisphere, meanwhile, the president of Panama, Jose Raul Molino, has issued an executive decree that will see the Panama Ship Registry, the second-largest shipping registry in the world, cancel any vessel on international sanction lists.
Data from Kpler shows that 12.7% of the giant fleet flagged in Panama is sanctioned or shadowed.
Experts believe the sheer scale of the tanker fleet engaged in carrying sanctioned cargoes makes it nearly impossible to regulate.
Nearly two in three vintage tankers have carried Iranian, Venezuelan or Russian cargoes this year.
According to estimates from broker Gibson, nearly 63% of all tankers above 25,000 dwt built in 2009 or older are either trading sanctioned Iranian, sanctioned Venezuelan and/or have been solely engaged in Russian trade over the past six months.
Global insurer Allianz’s annual shipping report published earlier this year noted of the shadow fleet: “Despite efforts to crack down on these vessels, the number of tankers is actually increasing, and we have seen a number of groundings and collision incidents.”
“Although regulators and governments are evidently keeping an eye on the grey fleet, its enormous size now arguably makes it harder to regulate,” stated a recent report from broker, BRS.
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)