Dark Side
How Greek Companies and Ghost Ships Are Helping Russia
By Elisabeth Braw, FP, 23/11/22
Nov 25, 2022 - 4:22:56 PM

Vessels from Greece and phantom fleets of unregistered ships have allowed Moscow to evade sanctions and export its oil—but it’s about to get more difficult.

The Liberian-flagged oil tanker Ice Energy (L) transfers crude oil from the Russian-flagged oil tanker Lana (R), off the shore of Karystos, on the Greek island of Evia, on May 29.

The United States banned Russian crude oil imports months ago, and Russian ships are banned from U.S., British, and EU ports. On Dec. 5, the European Union’s sanctions on Russian crude come into effect. But Greek and other European shipping companies are currently—and legally—helping Russian exporters get their oil to the desired destination.

What’s more, a growing ghost fleet of ships that officially don’t exist and cannot, as a result, be traced or investigated is transporting sanctioned Russian goods around the world, just as it was already transporting banned Iranian, Venezuelan, and North Korean commodities. The ghost fleet is likely to grow as the EU’s oil sanctions kick in. That seriously undermines the sanctions—and creates risks on the high seas.

In May, Lloyd’s List Intelligence, which monitors global shipping, began noticing an odd pattern at the Russian ports of Ust-Luga, Primorsk, Novorossiysk, and St. Petersburg. Of the 204 large tankers departing the ports between the 1st and the 26th of that month, 58 belonged to Sovcomflot, the Russian shipping giant. But many more of the oil tankers—79—were Greek owned. “A vast increase in voyages to India, Turkey and China indicate where the cargo, normally bound for North America and Western Europe, is now going,” Lloyd’s noted in a subsequent report.

During the same month, the research outfit observed seven other large oil tankers leaving the waters off the Greek city of Kalamata and the Maltese cities of Marsaxlokk and Marsaskala and then heading to India, China, and the United Arab Emirates. They had been loaded with Russian oil by smaller tankers traveling from the Black Sea ports of Novorossiysk, Tuapse, and Taman, Lloyd’s found. Greek vessels and ports are, in other words, helping Russia export its oil.

But, as Richard Meade of Lloyd’s List Intelligence pointed out, “there’s nothing illegal about what the Greek ports and shipping companies are doing. It’s just a shift in trade due to restrictions, and the Greek companies are not doing it in a clandestine way. But when the rules change, they won’t be able to do what they’re doing today.” That change will occur on Dec. 5, when the EU’s ban on Russian crude comes into effect, and Feb. 5, when its ban on refined Russian petroleum products does so.

Greece’s large shipping industry has spotted an opportunity.

Although the EU banned Russian vessels at the end of May, Russian oil can still be delivered to the EU on tankers owned or flagged in other countries. This appears to be where Greece’s large shipping industry has spotted an opportunity. Indeed, the fact that traders are now rushing to fill up on Russian oil suggests that the time lapse between the planned-sanctions announcement in October and their coming into effect may have turned into a grace period for companies and countries wanting a bit more of the black gold.

“What the Greek tonnage is transporting is oil that has been already contracted and is fully approved by the EU. … It’s something that our countries desperately need,” Greek shipowner Evangelos Marinakis told the industry publication TradeWinds in July, after Ukrainian President Volodymyr Zelensky told a Greek economic conference that Greek shipping companies were “providing almost the largest tanker fleet for the transportation of Russian oil.” But now that grace period is closing. On Nov. 21, the U.S. government announced that it too will ban the maritime transport of Russian crude from Dec. 5. U.K. sanctions on Russian oil and oil products also come into effect on that date.

Those bans, though, are likely to accelerate another growing maritime trend: illegal shipping by vessels that officially don’t exist. In recent years, a whole new fleet of ghost vessels has joined the world’s official fleet of vessels. Unlike the officially existing vessels—which are registered in a flag state (most often Panama, Liberia, or the Marshall Islands), have an International Maritime Organization (IMO) tracking number, and are covered by commercial insurance—the ghost vessels are not registered with a flag state or the IMO and don’t have commercial insurance.