Of the hundreds of oil tankers that have departed Russia since the start of the invasion of Ukraine, about 20 tankers are now listing their status as “For Orders” or “Drifting,” which indicates that the oil on board is for sale. Many more Russian tankers are simply disappearing from tracking systems.
As the war in Ukraine drags on, Russian tankers carrying crude oil and petroleum products are also increasingly disappearing from tracking systems. The ships’ transponders are being turned off for hours at a time,
International regulations require vessels like oil tankers to keep their transponders on almost all the time. Similar behavior was observed last decade when the United States leveled sanctions against Venezuela and Iran, making it illegal to buy oil from those nations.
“Russia is following the Venezuelan and Iranian playbook, with a slight twist,” said Andy Lipow, president of consulting firm Lipow Oil Associates, according to CNN Business.
Yes, the White House banned imports of Russian oil into the United States. But that does not prohibit other countries from buying Russian energy. But there is a stigma associated with buying Russian energy that has created a de facto embargo.
Analysts say that helps explain the spike in dark activity among Russian-flagged ships. Buyers don’t want to be outed as the ones scooping up Russian oil during the deadly war in Ukraine.
Who is buying Russian oil?
According to John van Schaik, an oil-industry expert at the energy information company Energy Intelligence, it is unusual to see so many tankers sailing under “for orders” status, and it likely had to do with the U.S. ban on Russian imports combined with self-sanctioning among oil companies, reports the New York Times.
It’s not always possible to know where the oil will end up, he said, but traders could quietly sell it to refiners that cared less about their reputation than about price.
“Once you put the crude somewhere in a tank on land, it is anonymous,” Mr. van Schaik said. “You blend it with some other crude, load it on another tanker and sell it as European Sour Blend and nobody knows its origin was Russia.”
So, it boils down to the simple question – Who is buying Russian oil? It can be said that China and India, as well as Singapore and Turkey, have sharply increased their receipts of Russian oil in the weeks since the invasion, reports QCaptain.
Those open to buying Russian oil are not only trying to avoid reputational damage or penalties. They’re also having to navigate financing as many banks stop issuing letters of credit.
