Russia: Dark Fleet Shows 8% Growth in Q3

Windward’s Risk Insights report is a quarterly update on all risk at sea, offering an overview of any emerging behavioral trends in developing hubs prone to illicit activity. The report analyzes the behavior of tankers and cargo vessels from the world fleet, and takes a close look at those specifically associated with sanctioned regimes, in the context of sanctions compliance and deceptive shipping practices, such as dark activities, ship-to-ship (STS) operations and location (GNSS) manipulations.

Deep Dive into Deceptive Shipping Practices

Deceptive shipping practices (DSPs) are tactics used by bad actors to evade detection, sanctions, and regulations while engaging in illegal operations, such as oil smuggling and illegal trading. Deceptive actors are quick to adapt their tactics and constantly seek loopholes in existing regulations and sanctions. Staying on top of these developing illicit behaviors and tracking emerging hubs is crucial for growing your business, while staying compliant.

Russian Oil Exports – Direct Voyages

When comparing the overall number of direct voyages from Q3 2022 to Q3 2023, it’s clear that the volume of Russian oil being directly exported from Russia stayed more or less the same throughout the war and the developing sanctions. While the volume stayed the same, the destinations have changed quite drastically:

U.S./EU/UK

In Q2 2023, the average number of direct Russian oil exports was 32. This number dropped by 18% during Q3 2023. It seems like the volume of Russian oil to USA/EU/UK is continuously dropping, but has not yet completely stopped, even with the advanced sanctions posed.

Middle East/India

While Q2 2023 showed an increase in direct exports, Q3 marked a decrease to both destinations – a 14% and 10% decrease to the Middle East and India respectively.

LATAM

Q3 marked a new all-time high of direct export voyages to LATAM with a 30% increase. This is interesting, as we identified this continuous increase coming from one specific country – Brazil. Since the beginning of 2023, the number of direct voyages of Russian oil to Brazil has increased by 186%.

Tanker Voyages through the Bering Straits

In Q3 2023, an interesting trend emerged of both crude oil and oil products tankers leaving Russia through the Bering Straits, to China.

While the passage through Bering is clearly subject to seasonality, when comparing Q3 2022 to Q3 2023, there is an increase of 50% in Straits passages by tankers coming from Russia.

In addition to the overall traffic increase in the area, in 2022 there was only one such voyage from Russia to China through the Bering Straits. In Q3 of 2023 there were 10 – an increase of 900%.

Refined Oil Exports – by Origin and Destination

The data indicates that following the oil products price cap, many Western destinations imported refined oil from countries known to import Russian crude oil throughout the war:

Refined oil exports from India to the EU increased by 100% after the oil product price cap in February 2023

In 2023, the average monthly number of refined oil exports from Turkey increased by 29% when compared to 2022 – 50% of exports are destined to the Middle East

Refined oil exports from Turkey to the Middle East increased by 37% after the oil products price cap in February 2023.

Q2 Hubs for Ship-to-Ship Operations between Two Tankers, Where One of the Vessels Came from Russia

Q2 vs. Q3 Shifts in Hubs for Ship-to-Ship Meetings between Tankers, Where One Came from Russia

New hub alert! Data suggests a new hub is starting to evolve near Suez Canal – the average number of meetings in the area during 2022 was one. In 2023 so far, that average increased by 400%.

As media focus was directed to the Ceuta and Senegal hubs, it seems that activities there decreased. Both decreased by 70% compared to Q2.

South Korea, Mersin, and Malta hubs saw a 37%, 33%, and 28% increase (respectively) in meetings – Malta is an EU member state, but publicly tried to object to the 11th sanctions package that specifically targets STS operations.

Trade Destinations Following a Ship-to-Ship Engagement between Two Tankers, with 1 Coming from Russia

With September 2023 numbers still not finalized due to voyages still underway, data clearly indicates that there is a large increase in oil that has been transferred via a ship-to-ship meeting with a vessel that came from Russia, and is headed to LATAM.

LATAM has seen a spike in such voyages in Q3, with an increase of 350%!

EU’s decrease post-war continues to be not as high as expected given the many restrictions imposed. This is exactly the issue the 11th package (released relatively recently) is meant to solve, with a greater focus on such illicit STS operations.

Q3 Hubs for Dark Activities Following a Port Call in Russia

Direct Cargo Exports from EU to Russia

In June 2023, the EU announced a new sanctions package that included a cargo transit ban from Europe to Russia, including transit throughout Russia’s EEZ and territorial waters:
Containerized goods – a 19% decrease in vessels entering the Russian EEZ, and 33% decrease in vessels calling port in Russia after a port call in EU

For both bulk carriers and general cargo, data shows a small increase in visits to the Russian EEZ and port calls in Russia following a port call in EU – an indication that the 11th package has not yet made the impact regulators were hoping for.

Grain Trade Flows Analysis

In March-July 2022, the monthly average of cargo port calls decreased by 93% in the West Coast ports, while it increased by 240% in the Danube ports

Once the grain deal was signed in July 2022, monthly average port calls in both areas dramatically increased by 155% in the West Coast ports and by 85% in the Danube ports
In Q3, there was a decrease of 53% in West Coast port calls, but only a 3% decrease within the Danube – an indication that despite recent attacks on the Danube, the Danube ports are still stepping following the grain deal collapse to keep the grain flowing.
Source: Windward