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By John Helmer, Moscow

The US-led sanctions war against Russian fossil fuel exports, especially oil, has been the best thing to have happened to Sovcomflot, Russia’s leading shipping company and operator of the world’s largest oil and gas tanker fleets.

Revenues are up, earnings and profits are multiplying; Sovcomflot has never had so much cash in the bank; its debt is down to the lowest level in more than twenty years – and none of it is in American or European bank hands.

Released on August 28 and expressed in discreet language, the new company financial report says: “Revenues from tanker business segments (transportation of crude oil and petroleum products) are supported by favourable market conditions against the background of increased demand for tanker tonnage, taking into account the changing geography of international trade in oil and petroleum products. Despite the presence of a seasonal reduction in freight rates in the summer, the company believes that the market fundamentals, including the limited growth of the global tanker fleet due to the small number of orders for the construction of new vessels, suggests a high probability of stability in the medium term of freight rates at a level above the historically average.”

“Favourable market conditions” is Sovcomflot’s phrase for the US and NATO sanctions, first imposed on Sovcomflot’s financing and payment operations in February 2022, and escalated this year in European Union (EU) and UK sanctions targeting Dubai and Hong Kong fleet management companies. The reference to “changing geography” means what shipping experts and analysts from London to Oslo, Piraeus to Singapore acknowledge privately: “The war is good, very good for the oil tanker companies which can run the gauntlet of the Americans”, says a Greek source. The international shipping media are fearful of reporting this publicly.

London-based shipping publications like Lloyds List,  sold by the London-listed Informa group to the Montagu investor group, are not reporting what their industry sources agree is happening. “Some people tend to close doors behind them”, a veteran maritime news reporter coyly describes the news blackout. Seatrade, another Informa outlet, is restricting its reporting to NATO tracking of sanctions busting.  

US maritime media like GCaptain (California) and Marine Money (Connecticut) refuse to respond to questions about their news blackout. Equally quiet, although for different reasons, are the Indian, Chinese and Singaporean shipping press.  

Sovcomflot is now confidently predicting the worldwide split between the Russian and US- NATO fleets will continue for the foreseeable future. “Despite the presence of a seasonal reduction in freight rates in the summer, the company believes that the fundamental market fundamentals, including the limited growth of the global tanker fleet due to the small number of orders for the construction of new vessels, suggests a high probability of stability in the medium term of freight rates at a level above the historically average.”

Never better – that’s what the last phrase means in Russian.

Struggling and failing to prevent this is the new US enforcer of sanctions on Russia’s energy trade, Geoffrey Pyatt. “European decoupling from Russia”, “diversify energy supply routes”, “open and transparent energy markets” are the slogans Pyatt has been promoting.    “Russia is never again going to be seen as a reliable energy supplier.”

Left: Ambassador Geoffrey Pyatt with Victoria Nuland, then Assistant Secretary of State, during the Maidan phase of the Kiev putsch, December 2013.  Right: Pyatt in Sofia, Bulgaria as Assistant Secretary for Energy Resources, October 2022.  

As US ambassador in Kiev in 2014, Pyatt was one of the well-known  plotters of the putsch of February 21, 2014. He then became US ambassador in Athens where he took over Greek air and naval bases for US and NATO war operations, including secret nuclear weapons storage and transshipment.  One of Pyatt’s prime targets has been the Greek shipowners whose tanker fleets “play a dominant role” in transporting oil and gas, and which have defied the sanctions against Russian energy exports. Pyatt’s success with Greek politicians, military officers,  and journalists has been more limited against Greek capital.  

After Pyatt left Athens, a Greek group of journalists calling themselves Reporters United has produced a series of reports tracking Russian oil, gas and coal shipments, and highlighting the role of Greek-owned shipping companies in the sanctions-busting trade from the start of the special military operation in February 2022 until January 5 of this year.

The Athens press report, first published on January 23, 2023, concluded that “European ships are still exporting millions of tonnes of fossil fuels from Russia and providing crucial funds for Vladimir Putin’s war in Ukraine. On 5 December, the EU started enforcing an embargo on Russian crude oil exports. The sanctions were supposed to curtail revenues and at the same time dissuade European shippers from moving fossil fuels to the rest of the world. One month later, an Investigate Europe and Reporters United investigation finds the move is having limited impact: Moscow still profits highly from exports and European firms still facilitate much of the trade.”   


The total volume per company is calculated by summing up the deadweight tonne capacity of all the ships of a company transporting fossil fuels from Russia to international ports. The exact volume of fossil fuels carried by each ship is unknown. Source: https://www.investigate-europe.eu/

The tanker operations ascribed to the United Arab Emirates (UAE) and China (Hong Kong) were pinpointed in the Greek report as camouflage for Sovcomflot so the aggregate Russian tanker volume is significantly larger, though not as large as the Greek tanker volume calculation.

The report quoted a Ukrainian official: “I call on the responsible European officials to immediately investigate, and find out if sanctions are being violated, or if these firms are complicit in illegal practices by cooperating with Russia.” EU sanction against the UAE-registered Sun Ship Management affiliate of Sovcomflot was announced a month later, and included the Russian state’s fleet insurer.  The British government sanction against Sun followed on May 19.  

Reporters United of Athens claims its “open sources” for the campaign against Sovcomflot and the Greek tanker trade were entities called the Centre for Research on Energy and Clean Air (CREA) and Equasis.  Both are fronts for NATO sources of money and openly declare themselves on the NATO side in the war. For example, CREA has been publishing a “weekly snapshot” of European imports of fossil fuels from Russia.  

CREA’s website conceals its location and source of funding in Finland. However, its board membership reveals close ties to Demos Helsinki, “a globally operating, independent think tank.”  Demos also conceals its sources of funding, but its website indicates these include the European Commission, OECD, the United Nations Development Programme (UNDP),  the French state transport group RATP, Nokia, and the Rockefeller Foundation in New York.  

Equasis is an Indian-operated data source financed by the French government, as well as by transport agencies of the Canadian, British and US governments.  

The Greek Reporters United claims to “have been self-funded or supported by revenues from collaborations with international media.”   The funding of the collaborations with non-Greek journalism entities  can be traced back to US corporations like IBM and Oracle, among others;   as well as to George Soros’s Open Society Foundation and anti-Russian foundations in Germany.  A well-informed Athens source describes the journalists behind Reporters United as having professional and financial ties to newspapers like the New York Times and Le Monde.  In the group’s attack on Greek tanker operators transporting Russian fuel, the source suspects the influence of rival Greek tanker groups who are not on the US black list:  

Source:  https://www.investigate-europe.eu/
The targeting of these shipping companies by the US and the Kiev governments can be followed in the publications  of the Kiev School of Economics (KSE) and the KSE Institute. The KSE Institute’s money supply for its anti-Russian campaigns comes from official US, Canadian, Dutch and other NATO sources.

Corresponding to the failure of Pyatt’s effort against the Greek shipowners in the onshore media is Sovcomflot’s success at sea. Russian maritime sources say they have “looked through the SCF results” but they decline to comment.

(in millions of US dollars)

Report issued on August 28, 2023. Source: https://www.scf-group.com

Compared to the loss-making figures released for 2022, the new report reveals that revenue calculated on time-charter equivalence (TCE) is doubling this year. The earnings (EBITDA) have more than doubled. By paying down some older debt and converting to Chinese yuan-denominated bonds, the company says it has “systematically reduce[d] the debt burden and optimize[d] the repayment schedule of existing credit debt. In the reporting period, the SCF Group successfully completed the placement of bonds in the amount of 2.6 billion yuan, the proceeds from which were used to repay replacement bonds ZO-2023. Taking into account the high level of its own liquidity reserve, the company’s net debt amounted to $0.5 billion. The ratio of net debt to EBITDA as of June 30, 2023 decreased to 0.4x.” .

This ratio, the key indicator of the company’s vulnerability to foreign bank lenders, peaked at 6.2x in 2017. In 2018 the net debt reached its historical maximum of $3.6 billion. In the year 2000 the company had revealed – for the first time – that it owed $571.5 million to the Russian Finance Ministry and $630 million to western banks. Follow what happened next as Kremlin and company managers argued over how to direct shipping strategy for the national security and private investor interests.   

Left:  click to read sample.    Right: Sovcomflot’s chief executive, Igor Tonkovidov. A fleet engineer by profession, he has also trained in financial management at the University of London.   

A company insider comments: “The gearing is extremely low – the bank debt plus $350 million in Chinese bonds (2.5 billion yuan) are practically nothing. Earnings are high even with the reduced [fleet] tonnage. Overall, if these figures are reliable and there is no concealment of Russian bank facilities, SCF is in perfect shape.”

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