Ship management company

Russian tankers get Indian security cover via Dubai company

The logo of Russian state shipping company Sovcomflot is seen on the multifunctional rescue ship ‘Yevgeny Primakov’ moored in central St Petersburg, Russia February 3, 2018. REUTERS/Anton Vaganov

Join now for FREE unlimited access to Reuters.com

Register

NEW DELHI/LONDON, June 23 (Reuters) – India is providing safety certification to dozens of ships run by a Dubai subsidiary of Russia’s top shipping group Sovcomflot, official data shows, allowing oil exports to the India and elsewhere after Western certifiers withdrew their services due to global sanctions against Moscow.

Certification by the Indian Register of Shipping (IRClass), one of the world’s leading classification societies, provides a final link in the chain of paperwork – after insurance coverage – needed to keep the fleet afloat. tankers of the state-owned company Sovcomflot and delivering Russian crude oil to foreign markets. .

Data compiled from the IRClass website shows that it has certified more than 80 vessels managed by SCF Management Services (Dubai) Ltd, a Dubai-based entity listed as a subsidiary on the Sovcomflot website.

Join now for FREE unlimited access to Reuters.com

Register

An Indian maritime source familiar with the certification process said most Sovcomflot vessels have now migrated to IRClass, via the Dubai arm.

Shipping industry publication TradeWinds reported last week that the bulk of the Sovcomflot international tanker fleet that had been declassified due to sanctions was transferred to IRClass in April and May.

Classification societies certify that ships are safe and seaworthy, which is essential for obtaining insurance and gaining access to ports.

Russia’s crude oil sector, hit by tough sanctions due to Moscow’s invasion of Ukraine, has been forced to seek buyers outside the West while turning to Russian carriers and insurers for manage their exports.

India, which has refrained from condemning Russia given its long-standing security ties, has sharply increased its purchases of Russian crude oil in recent months. Read more

Western sanctions on Russia have prompted many oil importers to avoid trade with Moscow, pushing spot prices for Russian crude to record discounts relative to other grades.

This provided Indian refiners, who rarely bought Russian oil due to high freight costs, an opportunity to buy cheap crude. Russian grades accounted for around 16.5% of India’s total oil imports in May, compared to around 1% for all of 2021.

HIGH LEVEL

The Indian ship certifier is one of 11 members of the International Association of Classification Societies (IACS), leading certifiers that account for more than 90% of the tonnage carrying cargo globally.

The Russian Maritime Register of Navigation was also part of the group until March when its membership was withdrawn following a vote of 75% of IACS members. Membership of IACS, which sets technical standards, generally makes a certifier more attractive to insurers, ports, flag registries and shipowners seeking safety assurances.

The four main members of the IACS, the United Kingdom, Norway, France and the United States, have interrupted services to Russian companies due to the sanctions.

A spokesperson for IRClass, however, when asked about Sovcomflot’s fleet certification data, replied: “Indian Register of Shipping, as an international ship classification society, reiterates that we have not classified the ships that are owned, flagged or managed by Russian companies.”

The spokesperson declined to comment further on the matter, including on the link between the Dubai unit and its Russian parent company.

Sovcomflot is subject to sanctions and other restrictions imposed by the United Kingdom and the European Union, while Washington has limited its financial activities. The company did not immediately respond to a request for comment.

A spokesperson for IACS said IRClass’ actions were not a topic of discussion for the association.

“IACS is not involved in the operational and commercial activities of its members, including the assessment, inspection and approval testing of vessels and equipment and the issuance of class and statutory certificates where they are allowed,” he said.

“As such, these developments are not discussed within the association.”

Sovcomflot’s chief executive told reporters last week that the group had insured all its cargo ships with Russian insurers and that the cover complied with international rules. Read more

People familiar with the situation told Reuters this month that the state-controlled Russian National Reinsurance Company had become the main reinsurer for Russian ships, including the Sovcomflot fleet. Read more

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Nidhi Verma and Jonathan Saul and Reuters reporters; Editing by Edmund Klamann

Our standards: The Thomson Reuters Trust Principles.