UK Imposes Sweeping Russian Sanctions Targeting Sovcomflot and Shadow Fleet
The UK government followed the lead of the U.S. and yesterday announced sweeping sanctions targeting individuals and groups involved in Russian trade including more than 80 tankers as well as entities in more than 30 countries. The move came as former Prime Minister and now Foreign Secretary David Cameron arrived in the U.S. and ahead of planned G7 meetings.
“This signals the UK’s no tolerance approach to those enabling Russia’s illegal war,” the government said in announcing 46 new sanctions targeting the tanker operators as well as Russian weapons manufacturers, and defense importers as well as elements linked to the notorious Wagner Group.
The UK highlighted that it included four “operators of so-called ‘shadow fleet’ vessels used by Russia to soften the blow of oil-related sanctions imposed by the UK alongside G7 partners.” The primary effort is directly targeted at Sovcomflot’s fleet by listing the Dubai-based company step up to manage much of the Russian state shipping company’s fleet after the imposition of sanctions targeted Sovcomflot.
Discussing the sanctions, Anne-Marie Trevelyan, Minister of State in the Foreign, Commonwealth & Development Office, said “Today’s sanctions will hit Putin where it hurts, damaging Russian defense systems, and cracking down on illegal supply chains propping up Russia’s war machine.”
Oil Tankers (SCF) Management which began managing Sovcomflot’s fleet starting in the summer of 2023 was the primary target with Lloyd’s and Bloomberg reporting that the company manages over 60 crude oil and product tankers. Sovcomflot moved the vessels into a series of offshore entities to avoid the direct sanctions. The vessels have always been registered under international flags including Liberia.
The UK included three other small Dubai-based entities which are also linked to managing according to Lloyd’s mostly older, and smaller tankers that have been at the heart of the “shadow fleet.” Lloyd’s calculates that two of the companies, Radiating World Shipping Services and Star Voyages Shipping Services, are responsible for at least nine Aframax, three Suezmax, and five product tankers. The fourth company listed by the UK Lloyd’s believes has gone out of business and transferred management of four tankers to China.
The UK accused the four UAE-based entities of “using opaque corporate structures and deceptive shipping practices to facilitate unfettered trade in Russian oil, bearing down on Russia’s efforts to generate war revenues.”
These sanctions follow a similar effort by the U.S. which in recent weeks listed a few tankers for specific violations of the Russian oil price cap imposed by the G7. The U.S. efforts have also targeted management companies based mostly in the UAE.
With concern rising over the dangers of the shadow fleet of tankers, the IMO at its bi-annual general assembly yesterday adopted a resolution designed to increase enforcement efforts. They are aiming at reducing the viability of the shadow tankers which are often operating without insurance and seeking to avoid port state and flag inspections.
The U.S. and now UK sanctions come as the Western allies have been seeking to further increase the pressure against Russia. There has been renewed talk about efforts targeting the violations of the oil price cap and the tankers enabling the trade. Reuters and Bloomberg have recently reported that the efforts might be beginning to have an effect citing examples of shipping companies withdrawing from the Russian oil trade and vessels that appear to have been idled after the U.S. sanctions.