Greek shipowners rush to transport Russian oil before European sanctions are applied | International
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During the past decade of global financial storm, the idea that in Chinese, the ideogram used to refer to the crisis also includes the word chance. It is not so in Greek. And yet, it could be, at least in the language of Greek shipowners, who, after the setbacks suffered by their sector during the pandemic, have seen in the war in Ukraine and in the high demand for oil the opportunity to pocket millions of euros, taking advantage of the exceptions that Western sanctions on Russia and the loopholes in them still allow, before the ban on importing Russian crude into the EU comes into force on December 5.
Since Vladimir Putin ordered the invasion of Ukraine on February 24, Western countries have progressively reduced oil purchases from Russia; although the EU continues to be its main client, as it is the destination of 40% of Russian exports of crude oil and refined products. In contrast, the participation of European shipping companies in the movement of Russian oil has not only not decreased, but has increased considerably.
“Western-owned tankers account for a record proportion of shipping traffic leaving Russia after the invasion of Ukraine. Attracted by high freight prices, these ships have increased Russia’s ability to sell its oil on world markets, giving Moscow a much-needed financial cushion,” explains Jonathan Pingle, an analyst and researcher at Institute of International Finance that has compiled data on the maritime trade of Russian crude oil and has shared it with EL PAÍS.
Another list, compiled in this case by the Ukraine’s Institute for Strategic Studies on the Black Sea, reveals that, during June, Romanian, German, Danish (the giant Maersk), Italian and even a Spanish company loaded oil in Russian ports – a Ibaizabal Group’s oil tanker―although in this case it did so at the Caspian oil pipeline terminal, which receives Kazakh crude and, for the time being, is excluded from European sanctions, although half of the ownership of the consortium that manages this pipeline is Russian. None of these companies has agreed to answer the questions of this newspaper.
Among all these ships, those of Greek shipowners stand out. The Greek merchant marine has historically played a leading role in the sector; in fact, a third of the oil tankers that sail the planet’s seas are owned by Hellenic shipowners (although they normally sail under flags of convenience in which the relationship between the shipping company and the country whose flag is flown is null and is based on economic or fiscal benefits). Before the war in Ukraine, Greek freighters were responsible for transporting 35% of Russian crude, but since the Russian invasion was launched, this figure has risen to almost 55%. That is to say: more than half of the oil that leaves Russia, destined for European, Chinese, Indian ports or any other part of the world, is loaded by Greek tankers. Or what is the same, from a country of the same European Union that has promoted sanctions to weaken the Russian economy.
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One of the reasons is that the fifth package of sanctions approved by Brussels vetoes, since last April 16, Russian-flagged ships calling at EU ports (it is also prohibited for those sailing under that flag until April 24). February, although they later changed it). The US and UK extend the ban to ships owned or chartered by Russian companies. This has at a stroke reduced some of the competition from Greek businessmen: their Russian counterparts, who transported a fifth of their oil before invading Ukraine, while now barely move a tenth.
In any case, the main explanation is that it is a very profitable business. The risks of sailing in waters close to the conflict, the high demand for oil and the fact that Russian crude is being sold at discounts at a time of very high prices, have triggered the cost of freight. According to data from Clarkson Research cited by the agency Bloomberg, oil transportation companies are posting record profits in the past three months. At some points in April, in fact, more than 300,000 euros a day had to be paid to charter an oil tanker to Russia, 30 times more than it cost in January this year.
Among the companies that have made the most trips to Russia are the most important in Greece: those of shipowners whose personal wealth exceeds 1,000 million euros, such as Georgios Economou, Andreas Martinos, Georgios Procopiou or Giannis Alafouzos; all of them have interests in various sectors and extensive political connections. Alafouzos, for example, owns the Skaï-Kathimerini media group (close to the conservative New Democracy government) and the Panathinaikos soccer team.
The Ukrainian authorities have raised their voices in the face of what they see as an attempt to take advantage of the situation and guarantee Russia essential income to maintain the war effort. “We see how Greek companies provide most of the fleet that transports Russian oil. I am sure that this is not in the interest of Europe or Greece or Ukraine”, attacked the Ukrainian president, Volodímir Zelenski, at the beginning of July. The Ukrainian ambassador to Greece, Sergii Shutenko, has asked in several appearances that Greece “stop doing business with Russia”, but the president of the Union of Greek Shipowners, Melina Travlos, has replied that the Greek ships “are not doing anything illegal”.
This timely goose that lays the golden eggs for Greek shipowners has an expiration date. On December 5, the ban on importing Russian oil and its derivatives to EU countries will come into force. In this sanctioning round, the sixth approved by Brussels, European companies are also prohibited from insuring any ship that transports Russian crude, which is intended “to make it difficult for Russia to continue exporting oil to the rest of the world”, in particular to Asia, as far as Not enough pipelines have yet been built to meet demand.
The director of a Greek shipping company, whose ships have loaded Russian oil in recent months and who requests anonymity, says that the sector is aware of the regulation. He explains that, for now, his strategy is to “wait and see what happens” because he does not rule out the EU expanding the exceptions provided for in the text. Moreover, despite the fact that London promised to act in accordance with the EU – Lloyd’s, the insurance market that has dominated the maritime sector since the 17th century, is located in the British capital – finally the sanctions approved by the British Parliament are less restrictive: they only prohibit insuring ships carrying Russian oil to the UK.
Paris Anestis, a Greek lawyer specializing in European law and based in Brussels, explains that between Lloyd’s of London and companies based in the EU they cover 90% of navigation insurance: “Sanctions could have a very wide impact” . Despite this, he warns that Russian oil “will seek alternative routes.” “The Greek shipowner community, whose ships mostly sail under non-European flags, thinks that weaponizing trade is a big mistake,” explains Anestis. “Given this community’s history of surviving and even flourishing in turbulent times, it’s no surprise that they are ready to adjust to the compartmentalization of commerce. It is also easy to predict that new insurance companies will emerge outside the EU and the UK to cover non-European vessels”, he adds.
In fact, illegal export methods are already beginning to be tested, which exploit the limits of the sanctioning framework. Satellite images and navigation data from the Kerch Strait and the Russian port of Kavkaz (an area where El PAÍS found evidence of transfers between ships of grain stolen from Ukraine) show that exchanges of oil and derivatives are taking place in open waters. According to an investigation by The Sunday Times, cases in this area have increased tenfold since the invasion of Ukraine and many of the receiving vessels are Greek-owned. The same is happening in the bay of Kalamata (Greece), where, according to an investigation by the agency Reutersnot only European ships are receiving Russian crude, but also Russian ships are loading petroleum products refined in Greece for re-export.
the specialized publication Lloyd’s List Intelligence, which confirms the transfers in Kavkaz and Kalamata, has also detected similar practices off the coast of Denmark, Malta and Gibraltar. “They are shipowners who act on the margins of legality, and those who argue, pragmatically, that the world continues to need Russian oil regardless of what the West says,” predicts one of the analyzes of Lloyd’s List Intelligence. “In addition, they are well informed about these practices, which have already been tested in the seas of the Middle East”, he points out in reference to previous transfers of Iranian and Venezuelan oil on the high seas to circumvent sanctions.
One of the tactics used by the Greek merchant fleet to gain its dominant position in the world includes “the tradition of ignoring blockades” and “exploiting political crises”, Greek professor Gelina Harlaftis writes in her book A History of Greek Owned Shipping. The text, published in 1996, cites the cases of numerous Hellenic shipowners who amassed fortunes with these practices: from the breaking of the French naval blockade during the Napoleonic wars, to the supply of grain to Russia during the Crimean War; but also with the transport of weapons and materials to both sides during the Spanish Civil War and the Korean War, or the mockery of the embargoes on segregationist Rhodesia and socialist Cuba during the Cold War. The expert sums it up with one sentence: “It is clear that the benefits do not know political alliances.”
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