The coast off Southwold, Suffolk, has been designated an area of outstanding natural beauty but is also one of the few areas in the UK where ship-to-ship transfers are allowed, notes Ben Chapman of the Independent.
STS fuel oil shipments from Suffolk spotted by Global Witness and The Independent saw two tankers carrying 165,000 tonnes of Russian fuel oil worth more than $201m (£165m) making their way to the Middle East and Singapore.
These oil transfers are not illegal. However, such ship-to-ship transfers (STS) across Europe are increasingly being used to reload Russian oil onto ships that then head to Asia via the Suez Canal, according to tanker-tracking reports. There are other areas across Europe where STS transports take place and new STS transport ‘hubs’ have started to appear in recent months.
According to ship tracking and analysis by Lloyd’s List, China-owned supertankers are at the center of a new STS transport hub in the middle of the North Atlantic, about 860 nautical miles west of Portugal. Such business in the region has never been seen before, said Alex Glykas of shipping consultants Dynamarine at Lloyd’s List.
Russia is also redirecting exports of residual fuel oil (RFO) – the world’s largest export – away from the West and towards Asia, Africa and the Middle East, according to Roslan Khasawneh, senior fuel oil analyst at energy analysis firm Vortexa. .
“Russia’s changing flows are creating new transshipment hubs for Russian POAs, including offshore Kalamata in Greece, where there was a surge in ship-to-ship transfers, as well as Egypt, where imports of Russian fuel oil rose to a record 70 kbd in June . As a result, Egypt’s fuel oil exports jumped to a 10-month high of 120 kbd in June, mainly to Saudi Arabia,” Khasawneh wrote in a July analysis.
Increased STS shipments are helping Russia move more and more of its oil volumes to Asia and its main buyers there, China and India. These moves largely offset Western sanctions on Russian oil and the impact of the EU’s impending embargo on imports of seaborne Russian oil and products, due to take effect at the end of the year.
Western sanctions have so far failed to crush Russia’s oil exports as Moscow redirects crude and products to its more than willing Asian buyers, China and India.
Russian oil exports fell by just 250,000 bpd in June to 7.4 million bpd, the International Energy Agency (IEA) said in its monthly report for July. Despite crude and product export volumes being at their lowest level since August 2021, Russia’s export earnings rose by $700 million month-on-month on higher oil prices to $20.4 billion, or 40% above last year’s average, according to IEA estimates.
European ship owners, especially private Greek operators, have been carrying much of the Russian oil in the months before the EU’s ban on seaborne imports of Russian oil began. to take advantage of higher demand for deeply discounted Russian oil in China and India.
Russian crude and product exports have yet to see a significant decline. Despite slightly lower volumes, so far Putin is making more money from oil than before the invasion of Ukraine or last year as oil prices remain high.
The West’s main goal of crippling Putin’s revenue, but still allowing Russian oil to be exported somewhere in the world, led to the idea of capping the price of Russian oil. The G7 group of leading industrialized countries, led by the United States, is considering lifting a ban on insurance and all services that allow the transport of Russian oil if that oil is bought at or below a certain price.
By Tsvetana Paraskova for Oilprice.com
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