Spoovio / Reporters United
28 June 2023
Nikolas Leontopoulos
Thodoris Chondrogiannos
Chris Matthews
Konstantina Maltepioti
Western traders are moving Russia-linked oil at sea – ecological risks are rising
Spoovio / Reporters United
Western traders are moving Russia-linked oil at sea – ecological risks are rising
28 June 2023Uncontrolled ship-to-ship transfers are rife off the Greek coast. An Investigate Europe and Reporters United investigation reveals the influential role played by western oil giants. Greece's government claims little can be done as transfers occur in international waters despite growing environmental risks. New EU sanctions are targeting the opaque practice – but can they turn the tide on suspect sea transfers?
Walking along Mavrovouni beach, Yorgos Daoutakos points to where the endangered Caretta-Caretta sea turtles nest. Out at sea, ships are visible in the Laconian Gulf. Across the bay, a pair of oil tankers are cosying up for a ship-to-ship transfer. “If an accident happens, environmentally and financially we are dead,” the retired military officer and local activist says. “And this will be irreversible.”
This southern tip of the Peloponnese, popular among tourists for its pristine beaches and idyllic villages, has fast become a key oil artery. STS trades, where a ship unloads cargo to another at sea, occur daily here, ferrying Russia-linked oil and cargo of more opaque origins. All are orchestrated by charterers – some are major western firms.
Unlike high-profile Greek shippers – exposed last year for their Russia dealings – charterers have stayed mostly under the radar. Detailed information on them is a well-kept industry secret. “Shipowners are the taxi drivers, they go wherever their customer tells them to go,” a Greek shipping expert, who asked to remain anonymous, says. “The charterers are the customers; they determine where the taxi will go.”
Western traders reportedly helped Russia shift 533 million barrels of oil in the year after the Ukraine invasion – 25 per cent of its total seaborne exports. More than 10 million barrels of Russian crude switched hands at sea in May – S&P data estimates at least two million were discharged in waters off Greece. And while sanctions have curtailed their activity, a Reporters United and Investigate Europe investigation – combining information from industry sources, and shipping data from Marine Traffic, Equasis, Refinitiv and Kpler – reveals that western traders are still involved in STS operations in the Mediterranean.
This southern tip of the Peloponnese, popular among tourists for its pristine beaches and idyllic villages, has fast become a key oil artery. STS trades, where a ship unloads cargo to another at sea, occur daily here, ferrying Russia-linked oil and cargo of more opaque origins. All are orchestrated by charterers – some are major western firms.
Unlike high-profile Greek shippers – exposed last year for their Russia dealings – charterers have stayed mostly under the radar. Detailed information on them is a well-kept industry secret. “Shipowners are the taxi drivers, they go wherever their customer tells them to go,” a Greek shipping expert, who asked to remain anonymous, says. “The charterers are the customers; they determine where the taxi will go.”
Western traders reportedly helped Russia shift 533 million barrels of oil in the year after the Ukraine invasion – 25 per cent of its total seaborne exports. More than 10 million barrels of Russian crude switched hands at sea in May – S&P data estimates at least two million were discharged in waters off Greece. And while sanctions have curtailed their activity, a Reporters United and Investigate Europe investigation – combining information from industry sources, and shipping data from Marine Traffic, Equasis, Refinitiv and Kpler – reveals that western traders are still involved in STS operations in the Mediterranean.
The southern Peloponnese in Greece is now a key location for ship-to-ship transfers.Shutterstock
In the early afternoon of 4 June, the Gem No. 3, a Panama-flagged oil tanker, managed by a Taiwanese company, entered the Laconian Gulf. At 3:41pm, it accosted the Dale, a tanker operated by Swiss commodity giant Trafigura, arriving from the Russian port of Novorossiysk. As if they were mating, the two tankers remained tied together for almost a day, after which a large portion of the oil product that Dale was carrying had been transferred to the belly of Gem No 3. Gem No. 3 then found another tanker to mate, Star C, also arriving from Novorossiysk. Then, the Gem No 3 left for Sidi Kerir in Egypt.
A few months earlier, Puma Energy, a Trafigura subsidiary, was involved in a Laconian sea transfer with Nanda Devi, a shadow fleet tanker then owned by Gatik, a mysterious company based in Mumbai. Industry insiders believe it is closely linked to Rosneft, the sanctioned state oil giant. Gatik has emerged from anonymity to become a major mover of Russian products and is synonymous with the risks associated with the shadow fleet. Shipping data shows Puma Energy operates The Prospector, an oil/chemical tanker which performed STS trades on 9 and 12 December with the Nanda Devi (origin of the product moved is not clear). A Trafigura spokesperson said: “We never comment on commercial transactions”, adding that the firm has not purchased Russian crude oil since May 2022 and that they “continue to comply with applicable sanctions”.
It is not only shippers reshaping global oil flows. Indian refineries imported almost no Russian oil before the war, but the Sikka port in Gujarat is now the largest global importer, and the largest exporting port to the EU. “A lot of Russian product is flowing Εast… the Indians are refining it, and then shipping it back to Europe. Russian molecules are still entering the European market, just in different forms,” says an oil trading executive, who asked to not be named.
The STI Guard, owned by the Italian-led Scorpio Tankers, docked at Sikka on 8 April, where it was loaded with diesel. Two weeks later this fuel was discharged onto the BP-chartered Gemma in the Laconian Gulf, and then unloaded in Croatia. Gemma went next to Malta for a sea transfer with STI Gladiator, another Scorpio Tankers ship arriving from Sikka. The Gemma, owned by Greece’s Super Eco Tankers, then moved this oil to France. Super Eco Tankers confirmed the movements of the Gemma vessel, saying that the firm always conducts due diligence and that “the fares were found to be perfectly legal”. Scorpio Tankers did not respond to requests for comment.
A BP spokesperson confirmed the firm chartered the Gemma tanker for seven months until mid-May 2023, but said the trade with STI Guard was chartered by a third party. They said the second transfer was a cargo of jet fuel which was “certified to not include components of Russian origin.”
STS trades – also common near the Spanish north African enclave of Ceuta and the Canary Islands – allow tankers to unload their cargo efficiently, instead of a costly wait in a terminal queue. “If a shipment costs about $200,000 through a terminal, STS will cost about $25,000,” explains Alex Glykas, a director at Dynamarine, an Athens-based maritime consultancy.
Links to sanctions evasion are widely touted and although evidence is scarce, analysts said in May that there has been a 225 per cent increase in “dark” STS transfers, where vessels turn off their tracking systems. Lela Stanley, a senior investigator at campaign group Global Witness, says STS transfers are being actively used “to obscure the origin of sanctioned Russian oil, undermining efforts to stop the flow of revenue to the Kremlin”.
New EU sanctions unveiled on 23 June included a ban on ships switching off their tracking systems when transporting Russian oil and access to EU ports for vessels doing suspect STS trades. “We are taking seriously all allegations or reports of possible breaches of EU sanctions, including through deceptive practices such as suspicious STS transfers,” an EU official told Reporters United and Investigate Europe.
There is no suggestion that those named in this article operated illegally or in any way evade sanctions.
A few months earlier, Puma Energy, a Trafigura subsidiary, was involved in a Laconian sea transfer with Nanda Devi, a shadow fleet tanker then owned by Gatik, a mysterious company based in Mumbai. Industry insiders believe it is closely linked to Rosneft, the sanctioned state oil giant. Gatik has emerged from anonymity to become a major mover of Russian products and is synonymous with the risks associated with the shadow fleet. Shipping data shows Puma Energy operates The Prospector, an oil/chemical tanker which performed STS trades on 9 and 12 December with the Nanda Devi (origin of the product moved is not clear). A Trafigura spokesperson said: “We never comment on commercial transactions”, adding that the firm has not purchased Russian crude oil since May 2022 and that they “continue to comply with applicable sanctions”.
It is not only shippers reshaping global oil flows. Indian refineries imported almost no Russian oil before the war, but the Sikka port in Gujarat is now the largest global importer, and the largest exporting port to the EU. “A lot of Russian product is flowing Εast… the Indians are refining it, and then shipping it back to Europe. Russian molecules are still entering the European market, just in different forms,” says an oil trading executive, who asked to not be named.
The STI Guard, owned by the Italian-led Scorpio Tankers, docked at Sikka on 8 April, where it was loaded with diesel. Two weeks later this fuel was discharged onto the BP-chartered Gemma in the Laconian Gulf, and then unloaded in Croatia. Gemma went next to Malta for a sea transfer with STI Gladiator, another Scorpio Tankers ship arriving from Sikka. The Gemma, owned by Greece’s Super Eco Tankers, then moved this oil to France. Super Eco Tankers confirmed the movements of the Gemma vessel, saying that the firm always conducts due diligence and that “the fares were found to be perfectly legal”. Scorpio Tankers did not respond to requests for comment.
A BP spokesperson confirmed the firm chartered the Gemma tanker for seven months until mid-May 2023, but said the trade with STI Guard was chartered by a third party. They said the second transfer was a cargo of jet fuel which was “certified to not include components of Russian origin.”
STS trades – also common near the Spanish north African enclave of Ceuta and the Canary Islands – allow tankers to unload their cargo efficiently, instead of a costly wait in a terminal queue. “If a shipment costs about $200,000 through a terminal, STS will cost about $25,000,” explains Alex Glykas, a director at Dynamarine, an Athens-based maritime consultancy.
Links to sanctions evasion are widely touted and although evidence is scarce, analysts said in May that there has been a 225 per cent increase in “dark” STS transfers, where vessels turn off their tracking systems. Lela Stanley, a senior investigator at campaign group Global Witness, says STS transfers are being actively used “to obscure the origin of sanctioned Russian oil, undermining efforts to stop the flow of revenue to the Kremlin”.
New EU sanctions unveiled on 23 June included a ban on ships switching off their tracking systems when transporting Russian oil and access to EU ports for vessels doing suspect STS trades. “We are taking seriously all allegations or reports of possible breaches of EU sanctions, including through deceptive practices such as suspicious STS transfers,” an EU official told Reporters United and Investigate Europe.
There is no suggestion that those named in this article operated illegally or in any way evade sanctions.
EU sanctions announced last week aim to tackle suspect STS trades linked to Russia.Shutterstock
The big trading houses have made solemn statements about their exits from Russia. But in March 2023, a few months after the implementation of the price cap, US Treasury officials privately urged some to return, in a bid to bring stability to global trade. A few weeks later, Trafigura and Vitol said that they might step up trade in Russian oil.
While the Russian oil business, and scale of western oil traders’ role in it, becomes more opaque by the day, environmental fears are crystallising. The trend presents rising hazards, and an increased risk of oil spills which “would devastate European shores”, Global Witness’ Stanley says.
Tankers entering the Laconian Gulf approach an area rich in biodiversity, parts of which are protected Natura 2000 sites. When the Trafigura-operated Dale entered the bay, on its right was the idyllic beach of Elafonisos; on its left the beaches of Mavrovouni and Vathy, home to the protected sea turtles.
Greek MEP Petros Kokkalis told the European Commission in October 2022 that “the Laconian Gulf, with its extremely abundant fish stocks, is a Natura 2000 protected area and host to nine habitat types and 13 priority species” – including the endangered Caretta-Caretta turtles, “whose principal nesting areas are located on the adjoining beaches”.
Sea transfers can “contribute to air pollution through emissions of sulphur oxides, nitrogen oxides, and greenhouse gases”, says Kostis Grimanis from Greenpeace Greece, adding that “noise pollution can disturb marine species.” These fears are shared by a handful of Greek politicians, on a local and European level. But their voices are barely heard in a country where shipping is considered, along with tourism, the number one industry.
Dynamarine, the Athens consultancy, estimates the incident percentage in STS operations is 2.55 per cent. This includes various incidents (vessel collision, oil spill on deck or sea, personnel injuries etc). “If an STS is performed with due diligence the risk is closing down to zero,” Glykas assesses.
But Giannis Polychronopoulos, a businessman who has run de-pollution activities in Greece’s seas for decades, believes authorities are ill-prepared for an oil spill. “There should be an imminent reaction,” he says. “But at present, anti-pollution boats are 10 to 12 hours away from the spot. It’s a disaster waiting to happen.”
Glykas admits the likelihood of an accident is rising. Sanctions have enabled ageing shadow fleet ships to step in, and charterers, insurers and service providers of varying expertise to fill gaps left by largely absent western firms. Global service providers – firms that provide equipment and personnel for STS trades – are now on the periphery. Glykas says they have been “replaced by smaller organisations with an obvious lack of safety standards, evidenced by their unverified management systems or past performance assessments.”
While the Russian oil business, and scale of western oil traders’ role in it, becomes more opaque by the day, environmental fears are crystallising. The trend presents rising hazards, and an increased risk of oil spills which “would devastate European shores”, Global Witness’ Stanley says.
Tankers entering the Laconian Gulf approach an area rich in biodiversity, parts of which are protected Natura 2000 sites. When the Trafigura-operated Dale entered the bay, on its right was the idyllic beach of Elafonisos; on its left the beaches of Mavrovouni and Vathy, home to the protected sea turtles.
Greek MEP Petros Kokkalis told the European Commission in October 2022 that “the Laconian Gulf, with its extremely abundant fish stocks, is a Natura 2000 protected area and host to nine habitat types and 13 priority species” – including the endangered Caretta-Caretta turtles, “whose principal nesting areas are located on the adjoining beaches”.
Sea transfers can “contribute to air pollution through emissions of sulphur oxides, nitrogen oxides, and greenhouse gases”, says Kostis Grimanis from Greenpeace Greece, adding that “noise pollution can disturb marine species.” These fears are shared by a handful of Greek politicians, on a local and European level. But their voices are barely heard in a country where shipping is considered, along with tourism, the number one industry.
Dynamarine, the Athens consultancy, estimates the incident percentage in STS operations is 2.55 per cent. This includes various incidents (vessel collision, oil spill on deck or sea, personnel injuries etc). “If an STS is performed with due diligence the risk is closing down to zero,” Glykas assesses.
But Giannis Polychronopoulos, a businessman who has run de-pollution activities in Greece’s seas for decades, believes authorities are ill-prepared for an oil spill. “There should be an imminent reaction,” he says. “But at present, anti-pollution boats are 10 to 12 hours away from the spot. It’s a disaster waiting to happen.”
Glykas admits the likelihood of an accident is rising. Sanctions have enabled ageing shadow fleet ships to step in, and charterers, insurers and service providers of varying expertise to fill gaps left by largely absent western firms. Global service providers – firms that provide equipment and personnel for STS trades – are now on the periphery. Glykas says they have been “replaced by smaller organisations with an obvious lack of safety standards, evidenced by their unverified management systems or past performance assessments.”
The Laconian Gulf is home to endangered Caretta-Caretta sea turtles.Shutterstock
E&Q Operations, according to shipping data, was used for Gemma’s April STS trade. Three unrelated sources voiced concerns about its safety record and technical knowhow. Ledra Ena, the E&Q ship used in the Laconian Gulf, has a negative record of inspections in the last three years, with numerous deficiencies identified. In response, E&Q said the deficiencies occurred several years ago, and that an inspection last month found no issues with the boat. The firm stressed that it has never caused any pollution in Greece.
Shadow fleet ships like the 20-year-old Nanda Devi, meanwhile, which Marine Traffic data shows is frequently involved in STS trades off Greece, have also stoked concerns. In April 2023, when the US further tightened the screw on its then owner, Nanda Devi had to change owner and reportedly, just like all Gatik ships, lost its American insurer. In essence, this means that an oil tanker involved in sophisticated oil transfers in the vicinity of Natura 2000 areas roams the Gulf uninsured (similar ecological fears extend to the straits of Denmark and Sweden – waterways now used by shadow fleet ships to ferry Russian oil to Asia). “With many vessels, we don’t know who ultimately owns them or who insures them,” explains Matthew Wright, a senior freight analyst at Kpler. “In the event of an accident, it could be difficult to find out which insurance company will pay for it and whether it will pay.”
Around the same time, St. Kitts de-flagged several Gatik ships, including the Nanda Devi. Since then, the tanker has operated under Gabon’s flag. The flag has doubled in size this year, and according to analysts, serves mainly high-risk shadow fleet vessels. Gatik did not respond to requests for comment.
The Paris MOU, an international framework used by the industry, classifies flags into white, grey and black, depending on how well they perform in inspections. Reporters United and Investigate Europe analysis of Marine Traffic and Equasis shipping data shows at least seven ships sailed under ‘grey’ or ‘black’ flags during STS trades off Greece in recent weeks. Industry watchers have warned that the shadow fleet, which numbers several hundred vessels, is “flocking to registries that will hold them to a lower standard”.
So, does anybody care?
Locals in the Peloponnese have repeatedly appealed to the Greek coast guard. Opposition MPs have questioned the minister of maritime affairs – who has a reputation of being too friendly with the industry. In Brussels, MEPs have done the same with the European Commission.
But the reply is always the same: As long as STS operations occur outside Greece’s territorial waters, the authorities have no jurisdiction. Under Greek law, the practice is allowed only in three specific areas, in accordance with the Marpol convention on marine pollution. In a statement, Greece’s maritime ministry said the country has “an effective mechanism in order to rapidly deal with any kind of pollution incidents”.
Shadow fleet ships like the 20-year-old Nanda Devi, meanwhile, which Marine Traffic data shows is frequently involved in STS trades off Greece, have also stoked concerns. In April 2023, when the US further tightened the screw on its then owner, Nanda Devi had to change owner and reportedly, just like all Gatik ships, lost its American insurer. In essence, this means that an oil tanker involved in sophisticated oil transfers in the vicinity of Natura 2000 areas roams the Gulf uninsured (similar ecological fears extend to the straits of Denmark and Sweden – waterways now used by shadow fleet ships to ferry Russian oil to Asia). “With many vessels, we don’t know who ultimately owns them or who insures them,” explains Matthew Wright, a senior freight analyst at Kpler. “In the event of an accident, it could be difficult to find out which insurance company will pay for it and whether it will pay.”
Around the same time, St. Kitts de-flagged several Gatik ships, including the Nanda Devi. Since then, the tanker has operated under Gabon’s flag. The flag has doubled in size this year, and according to analysts, serves mainly high-risk shadow fleet vessels. Gatik did not respond to requests for comment.
The Paris MOU, an international framework used by the industry, classifies flags into white, grey and black, depending on how well they perform in inspections. Reporters United and Investigate Europe analysis of Marine Traffic and Equasis shipping data shows at least seven ships sailed under ‘grey’ or ‘black’ flags during STS trades off Greece in recent weeks. Industry watchers have warned that the shadow fleet, which numbers several hundred vessels, is “flocking to registries that will hold them to a lower standard”.
So, does anybody care?
Locals in the Peloponnese have repeatedly appealed to the Greek coast guard. Opposition MPs have questioned the minister of maritime affairs – who has a reputation of being too friendly with the industry. In Brussels, MEPs have done the same with the European Commission.
But the reply is always the same: As long as STS operations occur outside Greece’s territorial waters, the authorities have no jurisdiction. Under Greek law, the practice is allowed only in three specific areas, in accordance with the Marpol convention on marine pollution. In a statement, Greece’s maritime ministry said the country has “an effective mechanism in order to rapidly deal with any kind of pollution incidents”.
Until 2020, most transfers took place in the Messinian Gulf, close to the port of Kalamata. But following an agreement on sea borders with Italy, Greece extended its territorial waters from six to 12 miles, meaning the Messinian Gulf would be subject to Greek law. Overnight, shippers and charterers moved to the adjacent Laconian Gulf, where territorial waters remain at six miles. In other words, STS maneuvers are legal but also heavily regulated by law when inside the territorial waters of sovereign states – six miles in the case of the Laconian Gulf. But completely unregulated at 6.1 miles.
The European Commission’s stance echoes that of the Greek government: “EU environmental legislation does not seem to apply in the present situation as the activities take place… in international waters where Greece does not have jurisdiction or has not exercised its sovereign rights.” Oil spills do not respect borders, however. The Hellenic Coast Guard confirmed to Reporters United and Investigate Europe that a leak from a tanker conducting an STS trade in international waters off-Kalamata happened on 17 September 2020. And while damage was minimal, the spill still spread into Greek territorial waters.
And yet, the belief that little can be done is misguided. Service providers use the local port to move equipment and personnel out to the tankers. Government data shows Greece has issued dozens of service provider permits since 2019, including one in May 2023. Without these, STS trades are impossible.
A former head of the coast guard in Kalamata, who voted against granting the permits, would regularly ask ships there to inform him of their activities. His bosses appeared unimpressed, and months later, according to two separate sources, he was transferred to another port. All the while, Yorgos Daoutakos, the local activist on Mavrovouni beach, continues to raise the alarm over his “piece of heaven” in the Peloponnese that is now on the oil tanker front line.
This story is part of Fuelling War, a joint investigation series by Investigate Europe and Reporters United. Versions of this article are published with media partners Republik (Switzerland), Der Tagesspiegel (Germany), Il Fatto Quotidiano (Italy) and Meduza (Latvia).
Sotiris Sideris (Reporters United), Nico Schmidt and Lorenzo Buzzoni (Investigate Europe) and Priscilla Imboden (Republik) also contributed to reporting.
The European Commission’s stance echoes that of the Greek government: “EU environmental legislation does not seem to apply in the present situation as the activities take place… in international waters where Greece does not have jurisdiction or has not exercised its sovereign rights.” Oil spills do not respect borders, however. The Hellenic Coast Guard confirmed to Reporters United and Investigate Europe that a leak from a tanker conducting an STS trade in international waters off-Kalamata happened on 17 September 2020. And while damage was minimal, the spill still spread into Greek territorial waters.
And yet, the belief that little can be done is misguided. Service providers use the local port to move equipment and personnel out to the tankers. Government data shows Greece has issued dozens of service provider permits since 2019, including one in May 2023. Without these, STS trades are impossible.
A former head of the coast guard in Kalamata, who voted against granting the permits, would regularly ask ships there to inform him of their activities. His bosses appeared unimpressed, and months later, according to two separate sources, he was transferred to another port. All the while, Yorgos Daoutakos, the local activist on Mavrovouni beach, continues to raise the alarm over his “piece of heaven” in the Peloponnese that is now on the oil tanker front line.
This story is part of Fuelling War, a joint investigation series by Investigate Europe and Reporters United. Versions of this article are published with media partners Republik (Switzerland), Der Tagesspiegel (Germany), Il Fatto Quotidiano (Italy) and Meduza (Latvia).
Sotiris Sideris (Reporters United), Nico Schmidt and Lorenzo Buzzoni (Investigate Europe) and Priscilla Imboden (Republik) also contributed to reporting.