Thursday, February 16, 2023

The Iranian armada of 'ghost' ships carrying Russian oil is growing, evading the intensifying Western sanctions on Moscow crude

Oil Gas Tankers

Oil and gas tankers are anchored off the Marseille harbour, southeastern France, October 27, 2010.
REUTERS/Jean-Paul Pelissier

https://markets.businessinsider.com/news/commodities/russian-oil-iran-ghost-fleet-ships-western-sanctions-2023-2 

  • Iran's "ghost" armada that carry Russian oil is growing as Western sanctions on Moscow crude intensify. 
  • At least 16 "ghost" ships have begun shipping Russian oil over the past two months, up from 9 earlier, per the FT. 
  • Russia has been luring shipowners with premium rates to trade its oil, which is at least 50% above normal market rates. 

Iran is deploying more ships to form part of a "ghost fleet" carrying Russian oil as Western sanctions on Moscow crude intensify. 

According to the Financial Times, at least 16 vessels under the "ghost" network - which has allowed Iran to evade US sanctions - have begun carrying Russian oil over the past two months. Earlier, just 9 tankers had shifted to the Russian route since the start of Moscow's war with Ukraine. 

Meanwhile, the volume of Russian crude shipped on the "ghost" ships surged to more than 9 million barrels in January from less than 3 million barrels in November, according to the FT report.

Russia, Iran and Venezuela — all countries burdened with US sanctions — are increasingly competing to sell their oil to India and China, a Vortexa analyst previously said.

Asia has become a key buyer of Russian oil since the country invaded Ukraine last year, buying the commodity at steep discounts. The sales have been facilitated by shipping companies that are willing to employ methods such as ship-to-ship transfers and going dark to decrease the risk of detection.

This month, Moscow got hit with a new wave of European Union sanctions on its refined oil products such as diesel, and will experience a new price cap on its fuel, adding to a December ban of seaborne Russian oil.

Under an existing price cap on Russian crude, G7 countries have banned other nations from accessing insurance and shipping services unless they abide by a cap on refined products. The measure aims to limit Moscow's ability to fund its war against Ukraine, while still keeping Russian oil flowing through global markets to prevent a shortage.

"Everyone is a sinner now," a ship broker told the FT. "The line between the grey market and the conventional tanker market has definitely gotten blurrier in the past year," she said. 

Per the FT, Russia has been luring shipowners and operators with premium rates which is at least 50% above normal market rates.

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