Russia’s state-controlled shipping giant Sovcomflot has sold roughly a dozen of its ships ahead of this week’s EU deadline for sanctions imposed over the invasion of Ukraine, The Wall Street Journal reported Thursday.
Sovcomflot, one of the world's largest tanker operators, was looking to sell at least 40 of its 121 vessels at short notice as the European Union and Britain ordered banks and companies to extricate themselves from Russian contracts by May 15, the shipping publication Lloyd’s List reported earlier this month.
Sovcomflot faced challenges in hauling oil and natural gas after Western ports, buyers, insurers and other companies withdrew from Russia. The United States placed debt and equity sanctions on Sovcomflot among 13 major Russian enterprises and entities in the immediate aftermath of Russia’s invasion of Ukraine.
The company sold five tankers to Dubai-based Koban Shipping and four natural-gas carriers to Singapore-based Eastern Pacific Shipping, WSJ reported, citing unnamed sources familiar with the matter.
The latter deal was said to come at a price tag of $700 million through a bank that had taken ownership of the vessels.
Some of the transactions will likely take place through a web of shell companies, shielding the vessels’ ultimate owners from the risk of penalties. Some of the vessels have changed their names and registered under different flags for insurance purposes.
Sovcomflot is negotiating to sell other ships with entities that include the China Merchants Group, WSJ reported.
Sovcomflot said previously it was selling “aging” vessels that would be unusable “due to restrictions.”
St. Petersburg-based Sovcomflot is also relocating the management of its ships to Dubai to continue accessing needed services, with most of its vessels registered there in April according to WSJ.
Sovcomflot's fleet includes 50 crude-oil tankers, 34 tankers for oil products, 14 shuttle tankers, 10 gas carriers and 10 icebreakers.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
