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Russian oil tankers ‘go dark’ in Putin's latest sanctions-busting ruse

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 Russian President Vladimir Putin takes part in an economic forum of former Soviet countries held in Bishkek - MIKHAIL METZEL/ AFP
Russian President Vladimir Putin takes part in an economic forum of former Soviet countries held in Bishkek - MIKHAIL METZEL/ AFP

The number of Russian oil tankers ‘going dark’ to avoid being tracked during voyages has tripled since the invasion of Ukraine.

Instances of so-called dark activity “skyrocketed” in the first month of the conflict and remain elevated, according to research by maritime intelligence group Windward.

It found a “significant and steady” increase in dark activity, with more than six Russian-affiliated tankers a day trying to avoid detection.

Typically ships go dark by switching off their automatic identification system (AIS), an on-board tool that transmits a vessel’s location to others. According to data from VesselsValue, a consultancy, 112 Russian-affiliated tankers have not sent an AIS signal for more than eight weeks.

“Vessels that do not signal location and intention are likely to be involved in illicit trading such as trading with sanctioned countries, performing illegal ship-to-ship tanker transfers, or fishing in prohibited waters,” said its analysts.

The rise in AIS switch-offs – which is against maritime law – has occurred alongside a sizeable increase in the number of tankers transferring oil outside of ports in ship-to-ship transfers, many of them taking place in the Mediterranean.

Those shipments have then gone on to destinations including China and India, which have been buying Russian crude at heavy discounts. Russia’s Urals blend has been selling at about $35 a barrel lower than Brent.

Together, they suggest operators have been looking for clandestine ways to move Russian oil without drawing attention from Western authorities.

Ami Daniel, chief executive of Windward, said transporting Russian oil had become “very, very profitable” since the conflict began.

He warned ship operators may go dark less often as the European Union cracks down harder on Russian oil.

Mr Daniel said: “It might help you for one journey, for one trade, but long term [it’s] probably not a good idea.”

He added that transferring oil between ships is “a good way to go off the radar or make it much harder to pick you up”, noting similar methods have been used to transport sanctioned Iranian and Venezuelan oil.

Windward also found a “growing trend” of Russian oil majors selling their vessels to non-Russian companies, another way of potentially avoiding scrutiny.

Since the invasion started, 180 such ships have had their ownership changed from Russian entities to non-Russian entities – roughly double the pace of transfers in 2021.

Mr Daniel said: “I don't think they're relinquishing control.”

Opec ramps up production as Biden increases pressure

Oil cartel Opec will ramp up production in July and August after its biggest member, Saudi Arabia, caved to pressure from the White House as Russia’s invasion of Ukraine squeezes supplies and causes prices to soar.

Opec has agreed to increase output by 648,000 barrels of oil per day over the two months, up from a planned increase of 432,000 barrels amid fears that fresh sanctions on the Kremlin could fuel an energy shortage.

Saudi Arabia in particular has benefitted from inflated oil prices, with last month its Aramco national oil giant fleetingly surpassing Apple as the world’s most valuable company, which is worth more than $2.4 trillion (£1.9 trillion).

Oil has been largely trading above $100 per barrel since March, hitting a two-year record of $120 this week before settling to around $112.

With the cost of extraction in Saudi Arabia the lowest in the world, the country has been experiencing large inflows of profits and has resisted prior calls to increase production.

While demand is high compared to supply, prices have not yet made new records.

The EU struck a deal with the UK on Tuesday to ban insuring ships carrying Russian oil, shutting Moscow out of the vital Lloyd’s of London market.

Without insurance, oil tankers are unlikely to risk shipping the fuel to countries in which it has not been sanctioned, putting further pressure on production.

Russia is on course to suffer its deepest recession since the collapse of the Soviet Union as a result of sanctions.

According to government analysis, Russia’s economy is set to take a £256bn hit from the sanctions, with its GDP expected to shrink up to 15pc this year.

Because of finite storage space, small increases in supply can have a large impact on the price of oil.

Russia produced about 10pc of the world’s crude oil before its war on Ukraine.

Opec’s decision comes after a sustained charm offensive from the White House, with senior diplomats leading a delegation to Saudi Arabia in recent weeks, the Financial Times reported.

American and European leaders are keen that high energy costs do not choke off delicate recoveries in economies across the world recovering from Covid restrictions and the supply chain chaos and wave of inflation that has followed it.

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