Posted 9 августа, 15:02

Published 9 августа, 15:02

Modified 9 августа, 15:48

Updated 9 августа, 15:48

«Shadow fleet» for Russian wheat: what oilmen can teach grain sellers

«Shadow fleet» for Russian wheat: what oilmen can teach grain sellers

9 августа 2023, 15:02
The attack of Ukrainian drones in Novorossiysk led to an increase in the cost of insurance and transportation of both Russian oil and grain. Oil workers are already transporting products with might and main by the «shadow fleet». Now it's time for agricultural producers, although there are no restrictions imposed on it.
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Sanctions

Sea terminals on the Sea of Azov no longer accept grain from suppliers, the SovEcon analytical center reports. Trains have accumulated on the railway, and the problem is growing like a «snowball» — there is nowhere to ship a new crop due to the lack of ships.

A strange situation has developed with Russian grain. On the one hand, agricultural products were not included in any sanctions package. The fear of famine in the poorest countries is so great that no one from Western countries wants to get to photos of the destruction in Ukraine also has videos of starving children in Africa. On the other hand, 80% of wheat and other grain exports go through the port of Novorossiysk, and there are Ukrainian drones and statements that any vessel leaving the port of Novorossiysk will become a legitimate target. They appeared after Russia announced the same thing at the exit from the grain deal.

Russia has few grain carriers of its own, so before the military operations in In Ukraine, sellers traded with traders, and they sent grain carriers to pick up the goods. After the attack of the Ukrainian drone on the tanker «Sig», no trader will take any risks.

Oil companies have adapted to this situation for a long time. Last year, Russia increased its shadow tanker fleet. By the end of 2022, Russia has 14% of the world's «gray» fleet. This has never happened, even in Soviet times. And the share of our country continues to grow.

What is the «gray» and «black» fleet

Before the military operations in In Ukraine, the Russian merchant fleet numbered 1,700 vessels, two-thirds of which transported oil or petroleum products, as well as fertilizers and agricultural products, according to an analytical report by S&P Global Market Intelligence.

In 2022, four types of vessels — LR1, MR, Aframax and Suezmax, which used to transport Russian cargo by foreign companies, have become wildly popular. Suezmax sold three times more in 2022 than in 2021. 350 vessels of the MR type changed owners, which is a third more than the previous year. Sales of Aframax increased by almost a third. Transactions were conducted through unknown small brokers, buyers were anonymous, and sellers wrote in contracts to protect themselves that ships should not enter ports where sanctions are in effect.

Vyacheslav Kulagin, director of the Center for Global Energy Markets, is reluctant to talk about the shadow fleet:

— There is no official information on the shadow fleet. It is clear that some ships somehow transported something. That they belong to someone through third or fifth parties. That's all there is to say. Indeed, when there are statistics. And she is not on this occasion. That's why he is a shadow fleet, because he is not directly linked to specific individuals and companies in any way. Conditionally, the shadow fleet is assigned somewhere. There is a ship, it has documentation, it is assigned somewhere. This is the official fleet. Another thing is that sometimes shadow deliveries are carried out when one oil is being transported, but it is called another. These are already shadow deliveries. These companies may be engaged, but none of the companies publish this in any of the reports. This practice is not new. It has long existed in Iran, Venezuela.

Analysts at Windward, which assesses risks in the maritime sector, say that the «gray» fleet is a new phenomenon in the global economy. These are not just ships that plow the world's oceans without identification marks. They belong to legal companies in jurisdictions that do not recognize sanctions. It's just that these firms hide their owners and the origin of the money, but they do it by legal methods, except for avoiding Western sanctions. Now there are about 900 such vessels in the world, the company says. This makes up 8% of the world fleet. It is extremely difficult to determine whether such shipowners work legally or not — they constantly change the flag.

In addition to «gray» there are also «dark» ones. This is a fleet that is used to transport sanctioned cargo. Ships sail with disabled navigation and ship identification system and use technology to hide the location. A third of such vessels are assigned to Panama, 28% — to Liberia, 15% — to the Marshall Islands. 14% belong to Russia. This is not so much, compared to the «gray» fleet. Here Russia is the absolute leader — 42% of the vessels belong to the owners associated with Russia.

By a large margin, both the «gray» and «black» fleets transport cargo to China and India. About 1.1 million barrels per day are shipped to China, a little less — about 1 million — to India. In third place in 2022 was Turkey with 0.5 million barrels per day. But there were also interesting targets among the ports: the Netherlands, Italy, Greece — countries that signed up to all European sanctions.

Grain exporters get ready

As Novye Izvestia wrote, after the attack of Ukrainian drones on a warship and tanker in the Black Sea near Novorossiysk, Russian food exporters may face «hidden sanctions» when prices for transportation and cargo insurance due to military risks will lead to a significant increase in the cost of goods. Already, insurance companies charge Russians 10 thousand dollars more per day than for similar cargoes in the ports of Romania or Bulgaria. Following the insurers, the carrier companies will either raise prices for their services, or refuse the deal altogether. The more and more often Ukrainian drones attack Russian vessels, the faster sellers of agricultural products will have to transfer to the «gray» or «black» fleet.

According to experts, Russia will need 34 grain carriers of 60 thousand tons and 27 ships of 40 thousand tons. Rosagroleasing seems to have placed an order at the shipyards. The only problem is that at least 3 years pass from the laying of the vessel to its launching, and grain needs to be transported now.

Despite the «clean» cargo, exporters will have to fork out for their own ships. As experts say, the state is not engaged in transportation. Apparently, we will have to learn from the experience of oil workers. This process has been debugged there, says Vyacheslav Kulagin:

— Companies optimize their business. They have subsidiaries with direct and non-direct control. Something is bought on them. The connection is not directly traced, it is controlled through some other structures. It is difficult to say exactly how many were transferred to which jurisdiction. Such data is not published. They can estimate it. Experts can estimate if such a volume is transported, then, in theory, such a number of vessels is necessary.