Greek shipping tycoons and their tanker companies are moving large volumes of Russian oil and are making a lot of money off these trades, which are mostly shunned by other Western ship owners after the West moved to sanction Russia’s crude.
Tankers owned by EU member Greece, one of the world’s biggest merchant vessel owners, continue to enjoy Western insurance, analyses have found, suggesting that they are involved in price cap-compliant trades of Russian oil, below the $60 per barrel cap, to the best of their knowledge.
Western shippers and insurers must have the so-called attestation that they are transporting Russian oil bought below the price cap to be compliant with the sanctions.
Since the price cap came into effect on December 5, Greek-owned tankers have been second only to the so-called “dark fleet” in the number of calls at Russia’s key oil export terminals, according to data from Lloyd’s List Intelligence data compiled by Lloyd’s List.
Analyses suggest that Greece’s tankers and tanker owners are careful to comply with the G7 price cap and avoid murkier trades that could have them stripped of protection and indemnity (P&I) coverage and undermine future credibility.
Still, the Greek fleet and their billionaire owners rake in a lot of money from trade in Russian oil. In the absence of many other Western shippers, the Greeks charge at least 30% more from traders to charter their tankers for Russian oil compared to charter rates for crude that is not under sanctions, ship brokers have told The Wall Street Journal.
The G7 price cap mechanism was strongly advocated – and finally achieved – by the United States, which wanted continued oil flows from Russia, with lower revenues for Putin, to avoid another major spike in domestic gasoline prices.
But Ukraine is not happy with the Greek tanker owners. After calling last year on Greek shippers to stop dealing with Russian oil, Ukraine has included the tanker firms of several Greek tycoons in a list of “international sponsors of war.”
TMS Tankers, owned by George Economou, Thanassis Martinos’ Eastern Mediterranean, George Prokopiou’s Dynacom Tankers, and Andreas Martinos’ Minerva Maritime are all included in the list proposed for sanctions. Those are “companies that provide the public and private sector with goods and services of critical purpose, as well as contribute to the Russian budget, thereby financing terrorism,” Ukraine says.
Economou’s TMS Tankers is the second-largest shipper of Russian oil, behind only Sovcomflot, the Russian state-owned shipping firm, NGO Global Witness said in an analysis cited by the Journal.
But many TMS Tankers still enjoy coverage from Norwegian insurer Gard, suggesting that the company is complying – to the best of the Norwegians’ knowledge – with the price cap mechanism.
“Gard has thorough procedures in place to ensure that we comply with relevant sanctions at all times, including the G-7 price cap,” a spokeswoman for the insurer told the Journal.
Greece-owned tankers accounted for 31% of tankers that called at five key Russian oil export ports in the Black and Baltic seas in February, Lloyd’s List has found. Some of the tankers remain insured by P&I Clubs, “underscoring that attestation processes and assurances the shipments were compliant with the price caps were in place,” Lloyd’s List’s Michelle Wiese Bockmann notes.
In the first year since the Russian invasion of Ukraine, tankers ultimately owned by the Greek tycoons collectively carried 292 million barrels of oil and oil products, Global Witness said in February 2023.
Minerva Marine, owned by Andreas Martinos and family, responded to Global Witness by stating, “we confirm that all business is conducted always in full compliance with all applicable sanctions laws and regulations”.
Greek tanker operators have dominated Russian oil trade since the sanctions came into effect, and the size of the Greek-operated fleet is nearly 2.5 times bigger than the next fleet, Russia’s, according to a Vortexa analysis from last month.
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Almost all the Greek-operated vessels still have coverage under the International Group of P&I Clubs, which “could give us an indication that the price cap mechanism is being used,” Mary Melton, a graduate analyst at Vortexa, says.
Greek operators are even more crucial for the Russian oil product trade.
“Greek operators have the largest share of the fleet engaging in the Russian CPP trade, but by a much wider margin than when analysing the total tanker fleet. The Greek-operated fleet moving Russian CPP is about 4 times larger than the next-largest fleet,” Melton noted.
By Tsvetana Paraskova for Oilprice.com
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The fact that Greek shipping companies are moving large volumes of Russian oil and are still enjoying Western insurance doesn’t automatically suggest that they are compliant with the Western price cam mechanism. There are many ways of avoiding it.
One way is that they will show cap authorities shipment bills based on the cap price but will deliver bills to the intended customers showing a price much higher than the cap but slightly lower than the market price allowing for a small discount that Russia offers to its customers.
The Western price cap is dead and could never be resurrected.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert