Sovcomflot tankers back in business after sanction delays

A Sovcomflot tanker blacklisted mid-voyage by the US appears to have abandoned its long-delayed delivery of Russian crude to an Indian refinery and redirected to China, according to ship-tracking data.

The change of destination appears to be part of a pattern of sanctioned SCF Group tankers returning to active trading after a hiatus of weeks or months as they shifted flag from the Liberian registry, Kpler cargo data suggests.

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The 105,700-dwt NS Century (built 2006) was named by US sanctions enforcers for alleged price cap breaches on 16 November while hauling 700,000 barrels of Sokol crude to the Indian port of Vadinar. The agency cited US-related business activities, which was believed to be a reference to the registry, which has offices in the US state of Virginia.

The vessel slowed down off Galle, Sri Lanka, two days later and remained there for more than a month while Indian authorities mulled whether it would be allowed to discharge, data from cargo and ship tracker Kpler suggested.

It was back on the move this week with a newly listed destination of Tianjin on China’s northeast coast, according to the data provider. It was heading East before appearing to stop again on Thursday. The SCF Group has been approached for comment.

Reuters reported earlier this week that the shipments of Sokol crude bound for the Indian Oil Corp. had been delayed by payment problems. But the possible abandonment of the Indian trade still highlights how the US’s increased use of targeted sanctions against SCF Group’s operations has had an impact, albeit relatively short-term.

SCF Group said in November it would appeal against the listing of a number of its tankers saying that the US had gone after its fleet “without any real legal ground” for doing so.

“SCF is a first-class shipowner, and operates its fleet to the highest standards with an exemplary safety record,” it said. “SCF intends to petition for the delisting.”

The US Office of Foreign Assets Control has sanctioned six vessels operated by the group since October before targeting its Dubai-based ship manager, Sun Ship Management, on 20 December, following similar moves by the EU and UK.

The six tankers were flagged by Liberia, which said it would de-list any ship subject to US sanctions. “You’re sanctioned, you’re cancelled. It’s as simple as that,” Liberian registry chief executive Alfonso Castillero told TradeWinds earlier this month.

The NS Century, owned by a Dubai-based single-ship company Gallion Navigation, had been managed by Sun Ship Management since April 2022.

It switched management to another SCF-linked entity in August, Oil Tankers SCF Mgmt FZCO, in a move seen by analysts as an attempt to limit exposure to Western sanctions.

Shipping database Equasis lists the company as the technical or commercial manager of 63 crude and product tankers.

It is based in a business park in Dubai outside of the main business district, which promotes itself as a “leading free zone” that allows for 100% foreign ownership, fast-track company incorporation and virtual workplaces for some companies. It has its “own laws and regulations for registered businesses”.

Security staff said they had no knowledge of Gallion at the site, which lists its address care of Oil tankers SCF Mgmt.

A business nameplate board at the block was empty. Reception staff declined to give further details citing client confidentiality.

Nobody at Sun Ship Management, visited by TradeWinds earlier this month on the 17th floor of a white marble-floored plush modern business block, was available for comment on its Dubai-based operations.

But tracking data suggests that the sanctioned SCF Group tankers, which had been idling or docked, were preparing to return to active trades after a process of reflagging from Liberia, a process that could take up to 25 days. The tankers are still listed by Equasis as flagged by Liberia, one of the world's largest registries.

The 157,300-dwt suezmax tanker SCF Primorye (built 2009), the first SCF tanker to be sanctioned for alleged price cap breaches in October, last delivered a cargo in September. It is due to collect a cargo from the Russian port of Novorossiysk in early January, according to Kpler data.

The 115,700-dwt Kazan and 114,700-dwt Ligovsky Prospect (both built 2003) headed towards the Far East Russian port of Nakhodka this week where they are both due to collect cargoes before the end of the year.

The 118,175-dwt Viktor Bakaev (built 2013), accused by the US of hauling oil sold for $70 per barrel, above the crude cap set by the G7 group of nations in December 2022, is due to collect a cargo from the Black Sea this week.

The sixth tanker, the 110,043-dwt NS Champion (built 2005) has remained off Ust-Luga since 8 December, days after it was sanctioned by the US.