Page 101 - Russia OUTLOOK 2024

· At the same time, one third of the total volume was shipped with the involvement from G7/EU service providers.
· This points to very low compliance with the price cap, likely via falsified pricing information (attestation fraud).
In the third quarter 2023 only 42% of Russian seaborne oil exports were shipped by tankers with P&I Club insurance, the enforcement tool, compared to 54% in the second quarter 2023.
P&I coverage varies by port: 80% of crude oil exports from Black Sea ports were shipped with P&I insurance, while only 9% of those from Pacific Ocean ports had such coverage in September 2023.
However, Russia is effectively dodging the oil sanctions using its growing shadow fleet: 178 loaded Russian shadow fleet tankers left Russian ports in August 2023, 72% of which were built more than 15 years ago and pose a significant risk to the environment, according to the Kyiv School of Economics (KSE).
The importance of the shadow fleet to Moscow is key, as it moved about 45% of Russia’s oil in 2023. Domestic and shadow fleet owners collectively moved over 70% of Russian oil cargoes in the first nine months of 2023.
Prior to the invasion of Ukraine in February 2022, the bulk of Russian oil was handled by a tiny clique of super-powerful merchants. Vitol Group, Glencore and Trafigura Group were the dominant players. This trio of companies publicly exited the trade in Russian crude oil not long after the invasion and as the prospect of sanctions became a reality. They have been replaced with dozens of opaque traders that are headquartered from Hong Kong to Dubai.
Excluding Russia’s Lukoil, China National Petroleum Corp. and Indian Oil Corp., the top five buyers of Russian oil today were all unknown entities pre-war. Closely associated with individual Russian producers, for example, in the first nine months of 2023, Bellatrix, for instance, handled about 20% of shipments from Surgutneftegas, the nation’s third-largest exporter over that period, according to the KSE Institute data. In 2021, the first year after its incorporation, it handled none.
101 Russia OUTLOOK 2024 www.intellinews.com