The Greeks are back with Russian oil: European tankers "lent a shoulder"

Under the conditions of a new package of US sanctions against Sovcomflot and grey fleet tankers, Greek shipowners "lent a shoulder" to Russian oil. In April, their vessels carry 20-25% of cargo from Russia. True, for this it was necessary that two factors converge. Russian oil has fallen below $ 60 per barrel — the ceiling of the "Big Seven", above which Western shipowners are prohibited from working with Russian oil. In addition, the cost of freight significantly exceeds the delivery of alternative oil.

A year and a half later, the tankers of the Greek shipowners returned to the transportation of Russian oil. It happened as never before in time. The last package of the United States imposed sanctions in March on another 183 tankers of Sovcomflot and the owners, who are considered the gray fleet. However, the Greeks did not return for old times' sake — shipowners from Greece transported Soviet oil during the Cold War.

Transportation of Russian oil remains one of the most profitable, while the Greeks have always been able to squeeze the maximum commercial benefits out of the situation. If in the first half of 2022 other European carriers mostly refused to transport Russian oil, then they continued to do so until the last — until November 2023, when the United States began to tighten sanctions against violators of the $60 price ceiling. Moreover, it was the Greek shipowners who contributed to the creation of a gray fleet for the transportation of raw materials from Russia. The Follow The Money organization has estimated that since 2022, shipowners have sold 230 tankers worth $ 6 billion to countries that have not joined the sanctions. And 127 ships "left" Greece.

For the local shipowners, who control most of the world's merchant fleet, these deals have become extremely profitable and now allow them to upgrade their fleet. The European Union announced sanctions on the price limit and the ban on supplies to Europe from December 5, 2022 in advance — in August. And since then, the purchase of tankers has begun, which have skyrocketed in price. So, a 15-year-old Aframax-class tanker has risen in price by 144%, was estimated in the Vessel Value. The average cost of the vessel increased from $ 16 million to $39 million.

Greek shipowners have been returning to the transportation of Russian oil since March, when the latest US sanctions came into force and also did it for a reason.

On the one hand, the cost of Russian Urals oil has dropped below $ 60, above which European tankers are prohibited from transporting raw materials from Russia. On the other hand, the freight rate is much higher.

According to AIS vessels, in April, at least 58 tankers of 12 Greek shipowners were operating on routes for the delivery of Russian oil. They mainly deliver raw materials from the Baltic and Black Sea ports to India and other Asian countries. On average, a round trip takes them a month.

Aframax and Suezmax class tankers can carry from 104 thousand tons to 161 thousand tons of oil and 7.3 million tons (54 million barrels) can be on the fleet participating in the transportation, whose price is now about $ 2.9 billion.

Most of all tankers were provided by Minerva Marine, which is part of the group of the largest Greek shipowners. Its 13 vessels are involved in the delivery of oil, not to mention petroleum products. For example, Minerva Kalypso transports up to 159 thousand tons from Primorsk to Indian Sika, Minerva Karteria carries up to 114 thousand tons from Ust-Luga to Chinese Zhoushan, and Minerva Alice is sent from Vysotskaya to Singapore and transports up to 114 thousand tons of oil.

Not all Greek shipowners have returned to the transportation of Russian oil, but the refuseniks are in the minority — five companies. Among them is the largest Greek group Maran Tankers.

The current number of tankers of Greek shipowners can provide transportation of 20%-25% of Russian oil and even more than went on the routes in August 2023. The maximum was recorded according to AIS data in June 2023 — more than 90 tankers of Greek shipowners carried Russian oil to foreign consumers. Their share reached a third of traffic.

If then freight rates dropped to $ 4.5-$ 4.8 million per one-way flight, now, according to Reuters, cargo delivery from the Baltic ports to the west coast of India is estimated at around $ 7 million. Despite the fact that the delivery of alternative oil to the same distance is twice as low.

Obviously, a window of opportunity has opened for Greek shipowners and it is more than a one-time profit. The US import duties announced by Donald Trump threaten to slow down the global economy, oil consumption and reduce demand for the transportation of raw materials. In this situation, the Greeks are filling a niche that may allow them to successfully survive another crisis that tanker companies may face.