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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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The Dark Fleet: How Unknown Traders Keep Russian Oil Flowing

  • Newly incorporated trading firms, mainly outside Europe, have managed at least half of all Russian crude and refined product exports so far this year, often using a 'shadow fleet' of tankers.
  • Many of these trading firms have been significant exporters of Russian oil since the EU embargo on seaborne Russian imports and the $60 per barrel price cap came into effect last December.
  • Recent signs indicate that Russian exports are starting to fall, with total oil exports dropping by 600,000 barrels per day in June, reaching the lowest level in over two years.

Newly established commodity trading firms incorporated in Hong Kong and the United Arab Emirates (UAE) have replaced trading and oil giants in handling Russian crude oil and products after the Russian invasion of Ukraine and the EU and G7 sanctions and price caps that followed.  

By some estimates, these one-year-old or younger trading companies have shipped at least half of all the Russian crude and refined products exports so far this year.

While major oil traders and supermajors backed out of dealing with Russian oil, many trading firms were incorporated in jurisdictions outside Europe and took over most of the trade with Russian oil with the help of many middlemen—often the ‘shadow fleet’ of tankers. This ‘dark fleet’ has expanded from shipping sanctioned Iranian and Venezuelan oil to include transportation of Russian crude and products. 

The business of transporting Russian crude to Asia has become “crazy good,” a trader dealing with Russian oil told Reuters early this year. 

Most of the shipping companies transporting Russian crude—without breaching the sanctions and price cap—are based in the UAE, Greece, India, and China, and some of them are partially owned by Russian firms, according to numerous anonymous banking and trading sources who spoke to Reuters

Russian oil firms have managed to find in recent months little-known traders willing to ship their oil, thus boosting export revenues. 

For example, state-controlled Rosneft, the top oil producer in Russia, has just concluded one of its biggest tenders in recent years to award export contracts to traders, sources with knowledge of the tender told The Wall Street Journal last week.  

Unlike last year’s flops in Rosneft’s tenders, the tender held in recent weeks has secured export volumes for the Russian oil giant. And the big winners are newly-created oil traders incorporated outside Europe. These are Hong-Kong-based Bellatrix Energy, as well as UAE-incorporated Amur and Tejarinaft, according to the Journal’s sources. 

The three little-known firms have been large exporters of Russian oil since the oil price cap of $60 per barrel and the EU embargo on seaborne Russian imports came into effect last December, per industry executives and Russian customs data seen by the WSJ. 

Russian crude and petroleum product exports held high in the first half of this year, contrary to many expectations of a slump in Russian exports after the embargo. The newly-created trading firms have played a key role in keeping those exports high. 

The trading firms that have emerged after the sanctions were announced in the summer of last year are estimated to have handled at least half of the Russian crude and petroleum product exports so far this year, per estimates by Reuters based on information from numerous trade sources and data from Eikon. 

So far this year, Russia has exported around 8 million barrels per day (bpd) of crude oil and refined products. 

However, signs have emerged in recent weeks that Russian exports are falling, while India—a top Russian crude customer alongside China—may have already reached its peak crude imports from Russia, some analysts say.

Total oil exports out of Russia slumped by 600,000 bpd in June, to the lowest level in more than two years, according to estimates by the International Energy Agency (IEA) in its latest Oil Market Report in July. 

Russia’s oil exports declined by 600,000 bpd to 7.3 million bpd in June, which was the lowest level of oil exports from the country since March 2021, per IEA’s estimates


Russia’s crude oil exports by sea alone continue to plunge and are now well below the February levels and nearly 1.5 million bpd lower than the recent peak at the end of April, according to tanker-tracking data monitored by Bloomberg.   

Russia’s crude shipments plunged by 311,000 bpd to 2.73 million bpd in the week to July 23, as exports out of the Western ports on the Baltic Sea and the Black Sea crashed to 1.17 million bpd, down by 625,000 bpd from the previous week, according to the data. 

By Tsvetana Paraskova for Oilprice.com

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