Russian oil exporters have almost doubled their use of aging ships since the start of the Ukraine war, raising concerns in the shipping industry that workers and the environment are being put at risk by vessels that are destined for scrap.
The proportion of seaborne exports of Urals – Russia’s main crude – carried on ships older than 15 years has risen sharply since the start of the war, according to data from shipbroker Braemar. During the six months before the conflict, the average proportion transported by older ships was 33.6 percent. As of December 2022, the share is 62.6 percent.
Western nations have imposed a number of restrictions on the sale of Russian oil since the full-scale invasion of Ukraine in February 2022, but overall seaborne exports continue to grow. the product flows to Asia instead of.
Oil majors typically considered scrapping tankers after 15 years of wear and tear, but an increasing number of ships at that age were being acquired by unscrupulous shipowners willing to buy older, cheaper vessels, the industry said.
As they move in the shadows, these tankers are less likely to be properly inspected and operated by experienced crews, potentially increasing the risk of accidents that could lead to oil spills and even fatalities.
“There’s a lot of it.” [of talk] on whether these vessels comply with international standards,” said Henry Curra, head of research at Braemar. “The assumption is this [they are] No.”
The potential volume of older vessels kept afloat is so great that it could soon constitute a substantial part of the total shipping fleet. Braemar predicts that the share of ships older than 20 years in the global tanker fleet could increase from 6 percent to as much as 16 percent by 2025.
The figures come shortly after reports of an explosion aboard an oil tanker in the South China Sea alarmed the shipping sector. Authorities said last week that three crew members were still missing from the Pablo tanker, which was linked to shipments of sanctioned Iranian oil and was built in 1997.
Sanctions against Russia have expanded a risky but potentially lucrative trade in transporting commodities restricted by Western lawmakers, which also includes oil from Iran and Venezuela. This month’s Financial Times reported that one Indian company transporting Russian oil quickly became one of the world’s largest tanker owners, acquiring nearly 60 vessels in two years.
Curra said “know your customer” controls at Braemar, which matches boat sellers with buyers, had become “much tighter”.
“Since the Russian sanctions, every counterparty has to be vetted,” he said.
One London lawyer said clients now “have to be really careful” if they sell a ship or send it for recycling, given the increased risk of tankers being acquired by unscrupulous ship owners or middlemen.
“When a ship moves into the dark fleet, all compliance with international standards goes out the window,” the lawyer said.
Industry figures have raised concerns that some of the progress made in improving environmental standards could be reversed. Oil spills from tankers have been falling steadily since the 1970s, according to data compiled by the International Pollution Tanker Owners Federation.
Last month, the CEO of one of the world’s largest shipping insurers he told the FT that “this is a social and ecological disaster waiting to happen”.
“No one will be there to pay” if there is an accident, warned Rolf Thore Roppestad, head of Norway’s Gard.
More news from Chris Cook in London