Representative image.
Credit: Reuters File Photo
London: A ship controlled by US-sanctioned Russian shipping giant Sovcomflot (SCF) discharged fuel oil at a western Indian port on Friday, two sources familiar with the matter said, indicating a resumption in the use of SCF vessels to supply Moscow's key market after a brief halt.
The SCF Baltica, carrying 90,000 metric tons of fuel oil for Reliance Industries, operator of the world's biggest refining complex at Jamnagar in Gujarat state, was expected to leave the port later on Friday after full discharge, the sources said. Indian refiners including Reliance became wary of receiving cargoes on Sovcomflot vessels after the US imposed sanctions on the Russian shipping giant on Feb 23 and designated 14 crude oil tankers as property in which Sovcomflot had an interest in the wake of the Ukraine war.
However, during a visit to India earlier this month, US officials noted the sanctions on the 14 designated SCF vessels but also said Washington wants stable global oil supplies and has not asked India to cut Russian oil imports, remarks that sources at Indian refiners said helped to assuage concerns. The SCF Baltica is not among the 14 ships that were slapped with sanctions in recent months by Washington. SCF declined to comment. Reliance also did not respond to a request for comment.
Gabon-flagged SCF Baltica was listed on SCF's website as part of its fleet of oil tankers. The vessel is managed by the United Arab Emirates-based Stream Ship Management and its owner was listed as Ashbourne Navigation care of Stream Ship Management, shipping databases show. Stream Ship could not be located for comment.
Another tanker, Vladimir Tikhonov, which is expected to arrive next week carrying Russian oil, is also managed by Stream Ship Management and listed on SCF’s website as part of its fleet, data showed. India is the largest consumer of Russian seaborne oil, sold at a discount after Western nations shunned purchases from Moscow for its invasion of Ukraine. Reliance mainly buys Russian crude but also imports fuel oil for processing at its coker to produce refined fuels. More Indian refiners are scheduled to receive Russian oil cargoes loaded on SCF vessels, according to LSEG flows. Earlier this month, Sovcomflot's CEO said that U.S. sanctions are limiting the company's tanker activity.
To squeeze Russia's oil revenue, the Group of Seven (G7) large economies and their allies have imposed a $60 per barrel price cap for Russian oil if Western services such as shipping and insurance are used. And to protect its freight and insurance premium outgo to Western nations, Russia wants to supply its oil, mostly sold by traders, using its own vessels and insurance cover.
Russian insurer Ingosstrakh has provided cover for SCF Baltica, freight documents showed. Resumption of trade in SCF vessels will help Russia protect its freight earnings.