Russia's shadow tanker fleet hit: Economist Pendzin on new sanctions package

He commented on the sanctions on Espreso TV.

‘As for the shadow tanker fleet of the Russian Federation, we are talking about 20% of the total volume of Russian oil sales. Russia has powerful contracts with India and China that fully comply with the maximum oil price allowed for Russians to sell on the foreign market - $60 per barrel. To prevent them from selling oil at a higher price, sanctions have been imposed on Russia's shadow tanker fleet. This shadow fleet is scrap metal, old tankers that can no longer be insured by traditional companies. Accordingly, this scrap metal is being kept in the waters of ports,’ commented Oleh Pendzin.

According to him, the Russians used to take old vessels into the shadow tanker fleet, insure them with Russian insurance companies, as no other company in the world would take on insurance of such vessels, and send them to sell oil.

‘The biggest problem with these tankers is that they are too old and have a lot of ‘incurable diseases’ that can lead to a catastrophe, primarily an environmental one. We understand that the Russian insurance business is subordinate to the state, like everything else in Russia. And the new U.S. sanctions package for the first time imposes huge restrictions on the two Russian insurance companies that provide insurance for these tankers - Ingosstrakh and AlfaStrakhovanie. That is, for the first time, the sanctions package specifically includes insurers that allow a ship to leave the port and head for international waters,’ the economist said.

In his opinion, this is the first and most important step to influence the activities of Russia's shadow tanker fleet. Today, more than 150 such tankers are already under sanctions.

‘Immediately after the U.S. package of sanctions, which is a rather serious blow to the Russian shadow tanker fleet, we heard the position of China's largest port, which completely stopped servicing these tankers. The UK has introduced a similar package of sanctions. And we are all waiting for the 16th package from the European Union, which will be timed to coincide with the third anniversary of the start of the active phase of hostilities,’ Pendzin concluded.

• On 10 January, the U.S. announced sanctions against a number of Russian oil and insurance companies. The list of sanctioned companies includes Surgutneftegaz, Gazprom Neft, Ingosstrakh, AlfaStrakhovanie and Radcomflot.
• The UK also followed the U.S. in imposing sanctions on Russia's largest oil giants, Gazprom Neft and Surgutneftegaz.
• Next Tuesday, 14 January, the European Commission will start consultations with EU countries on the 16th package of sanctions against Russia. Poland, which currently holds the EU presidency, hopes that it will be adopted before the third anniversary of the war in Ukraine.