NO: DELENG / 2017 / 70663
official media partner of national maritime foundation
Tankers for STS transfers that violate sanctions may be banned by the EU.
By Seaandcoast | 09/05/2023
Ship-to-ship transfers have emerged as the preferred method among Russian oil producers seeking to transport their crude to new non-Western markets. The smaller Suezmax tankers that serve Baltic ports are able to transload their cargoes into VLCCs through STS operations, allowing for cost-effective long-haul trips to Asia. With the exception of the most skilled tanker trackers, less legitimate STS transfers are used to conceal the trade and hide the origins of Russian oil. These operations are most well-known in the Mediterranean waters off Ceuta and Kalamata.
Although coastal states cannot regulate high-seas transfers, port states can still take action against tankers that are believed to be operating in violation of sanctions. Bloomberg reports that the European Union is looking into a plan to prevent sanctions-breaking tankers from transferring goods at sea from entering ports.
Refering to an expansion in "tricky practices" and the connected gamble of contamination in case of a STS move turned out badly, the European Commission has recommended that vessels connected to transload activities that disregard the G7 value cap may before long be restricted from EU ports. Spain has previously attempted similar measures in a limited capacity.
G7-domiciled shipping companies (owners, shipmanagers, insurers, class societies, and other service providers) cannot transport Russian oil priced above $60 per barrel under the price cap. In some jurisdictions, particularly in Pacific markets, there is ample evidence of noncompliance, which is frequently enabled by concealing activity and ports of call by disabling AIS. To discourage this behavior, the European Commission has also proposed banning tankers that disable their AIS.  
Given the limitations on Western players, Russian rough exporters have progressively depended on weight without connections to the G7. The former Sovcomflot tanker fleet is managed by Dubai-based Sun Ship Management Ltd.; Indian owner Gatik Ship Management has grown its fleet from two ships to 58 in a year thanks to Russian oil trading, making it one of the biggest names in crude tanking. These overseas owners have been buying up older ships, including tankers that have been in service for at least 20 years and are considered to be retired.
These vessels are many times protected through Indian or Russian P&I guarantors (with sketchy capacity to pay out in case of a significant spill). These owners don't have any ties to the G7, so they can transport Russian oil at any price without worrying about being banned by the EU.