The aging fleet of ships Russia uses to transport its main export and avoid oil sanctions could cause an environmental disaster, according to a Ukrainian report published this Monday.
The Kyiv School of Economics, also known as KSE Institute, has warned about the ecological risks of the so-called “ghost fleet”, used by the Kremlin to circumvent the G7 restriction that prohibits companies from insuring, financing or transporting Russian oil when it sells above $60 per barrel.
The price limitation measure was aimed at reduce the revenues that finance the Russian president’s war machine, Vladimir Putin. However, Moscow has resorted to using ships whose ownership has been reorganized to hide their connection to Russia, often through shell companies.
Despite these maneuvers, Russia has increased the capacity of its ghost fleet of oil tankers by almost 70% in the last year, going from transporting 2.4 million barrels per day in June 2023 to 4.1 million in June 2024, according to the KSE report.
In addition to evading sanctions, The use of aging and underinsured ships to transport oil exposes Russia to a potential ecological disaster. Two recent incidents in the Danish Straits have highlighted the environmental dangers posed by these ships.
Benjamin Hilgenstock, senior economist at the KSE Institute and co-author of the report, told Newsweek: “So far we have been lucky in that incidents have either been narrowly avoided or, when they have occurred, the ships were empty. But it’s only a matter of time until that luck runs out.”
The route of the ghost fleet skirts Spain
The KSE published a summary of incidents with Russian tankers around the world, highlighting the use of the ghost fleet to transport Russian crude oil. dDuring the first half of 2024, 72% of Russian oil exported by sea was shipped from Baltic and Black Sea ports, and 58% was transported on these ghost tankers, according to the KSE.
This implies that more than 75 million barrels per month They travel on vessels with an average age of 18 years, poorly maintained and probably with inadequate insurance, according to the report, which suggests that coastal countries establish “ghost fleet-free zones.”
Next, the report reveals with a map the various sensitive areas in a situation that the source itself classifies as “imminent disaster.”
The route of Russia’s ghost fleet
These areas include the Gulf of Finland (or Strait of Viro) between Estonia and Finland, the Danish Straits, the English Channel (or Strait of Dover), the Strait of Gibraltar, and for exports from the Black Sea, the Aegean Sea. In the period from January to June 2024, each month more than 90 million barrels of Russian oil – crude oil and refined products – passed through the waters of northern Europe. In the Aegean Sea, the corresponding figure is 50 million barrels. A large part of these shipments subsequently passes through the Strait of Gibraltar. Volumes remain stable compared to 2023, reflecting the serious infrastructure limitations mentioned above. Altogether, more than 70% of total Russian maritime oil exports must pass through one or more of these geographic points.
The issue of Houthi attacks on ships in the Red Sea could modify delivery routes, but not fundamentally alter the volumes indicated here. If ships carrying Russian oil decided to avoid this area, voyages from Baltic ports would no longer enter the Mediterranean; however, voyages from Black Sea ports would still have to pass through the Strait of Gibraltar.
Closer examination of ships carrying Russian oil reveals the associated environmental risks. In the period from January to June 2024, each month they passed through the Gulf of Finland, the Danish Straits and the English Channel some 36 million barrels of crude oil and 14.9 million barrels of petroleum products on ghost tankers, i.e. vessels that lack adequate oil spill insurance. Their advanced age—17 years on average for crude oil tankers and 18 for refined product tankers—is an additional problem. It is also instructive to note the number of voyages of this ghost fleet. About 50.9 million barrels in exports mean nearly 90 loaded tankers pass through these waters each month, and a similar number of empty vessels return to Russia. This means that, on average, six times a day, coastal communities in the Baltic and North Sea states must hope that no serious accidents occur.
The situation is no less worrying in the Aegean Sea. In the period from January to June 2024, an average of 20.9 million barrels of Russian crude oil and 11.9 million barrels of petroleum products transited this area each month on ghost tankers. These volumes correspond to 67 individual voyages of ships with cargo on board, whose average age is 18 years. In the Strait of Gibraltar, some 52.1 million barrels of Russian oil — 40.6 million barrels of crude oil and 11.5 million barrels of refined products — were recorded passing through the area each month, on average, in the period from January to June 2024, aboard ghost tankers with an age structure similar to those mentioned above. These volumes represent 83 individual trips with cargo on board. Additionally, Russian ghost tankers regularly conduct ship-to-ship transfer (STS) operations in the Mediterranean, off the coast of Greece, mainly in Laconia Bay, around Malta and near Ceuta, to facilitate exports to destinations. like China and India.
The Achilles heel of the ghost fleet is insurance.
The KSE suggested that, to reduce Russian oil revenues and ensure safety on the seas, governments They should require insurance documentation for all ships passing near their waters.
Protection and indemnity (P&I) insurance, required by international maritime law, can cover incidents. Countries applying the price cap should also pressure flag country authorities to verify oil spill insurance coverage when granting or renewing registrations.
Moscow has invested approxe 10,000 million dollars to develop its ghost fleet, toacquiring old oil tankers on the second-hand market and separating them from the countries that apply the price cap.
About 70% of Russian maritime oil exports and 90% of crude oil products were recently transported on ghost tankerswhich has allowed them to avoid the price limit, according to the KSE.
However, Moscow has had to resort to alternative insurerssuch as the state-owned Ingosstrakh, to secure the oil tankers of Sovcomflot, Russia’s largest shipping company, after being affected by sanctions.
These P&I policies were reinsured by the Russian National Reinsurance Company (RNRC), a subsidiary of the Central Bank of Russia.
At least three other Russian companies appear to be involved in providing P&I insurance for the ghost fleet, according to the KSE. Oil spill insurance on these vessels is likely to be insufficient. Flag countries have access to information on insurance coverage, but countries whose coasts these ships pass through do not.
In June, Danish Foreign Minister Lars Løkke Rasmussen stated that Denmark and a group of Western countries will try to restrict or stop the passage of the Russian ghost fleet through the Baltic Sea, invoking the rights of coastal states to avoid environmental damage.
The KSE will share its latest findings with the sanctioning authorities of allied countries, as the problem of Russian oil transportation is expected to continue to increase. Last week, the BBC reported that the British Treasury investigated 52 companies linked to the United Kingdom for violating sanctions on Russian oil, but has not yet imposed sanctions.
Source: www.huffingtonpost.es
