Russia responsible for 225% increase in secret transfer of petroleum at sea

As Russia tries to circumvent Western sanctions, more tankers are turning off their tracking devices to covertly transport petroleum.

A review of data from S&P Global Market Intelligence, including the Maritime Intelligence Risk Suite (MIRS) and Maritime Portal, shows a 225% increase in cases of turning off the Automatic Identification System (AIS), a system designed to maintain maritime safety and has recently helped track petroleum shipments.

Based on this data, in the first quarter of this year, 215 tankers with a total weight of 9.31 million tons were involved in 524 ship to ship (STS) transfer cases, which shows a significant growth compared to the same period of last year when 72 tankers with a total weight of 2.40 million tons were engaged in 161 cases of transfer and Russia had not yet been targeted by sanctions and price cap mechanism for sale.

According to the data, in the waters of Crimea, Russia’s exclusive economic zone and sea lines near Kaliningrad, there were 312 cases of clandestine STS transfers between January and March, compared to the past when there were only six cases a year. The situation shows that Russia is at the center of a growing global trend of using secret transfer techniques between two ships as a way to evade international surveillance when transporting petroleum.

These developments have taken place in the midst of a significant reduction in the export price of Ural grade oil compared to Brent oil. According to Platts Global Commodity Insights, the average price difference between Ural and Brent reached $37.80 cents in the first quarter of 2023, compared to $17.70 cents in the first quarter of 2022. This difference in January 2022 was about 3.7 dollars.

According to the Platts report, despite the price cap mechanism and sanctions, buying Russian petroleum remains very profitable, and tanker owners can earn millions of dollars on each trip for transporting this petroleum. According to S&P Global Commodity statistics, 102.4 million barrels of petroleum and petroleum products were likely transferred via covert STS transfer methods in the first quarter of the year, and information about their origin is unknown due to the covert nature of these activities.