A cargo of Russian crude oil is being switched between tankers to the north of the Cape Verde islands in the Atlantic ocean, suggesting new locations are being sought for an activity that has caused concern among regulators.
(Bloomberg) — A cargo of Russian crude oil is being switched between tankers to the north of the Cape Verde islands in the Atlantic ocean, suggesting new locations are being sought for an activity that has caused concern among regulators.
A vessel called the Volans began switching its cargo of about 730,000 barrels of Russia’s flagship Urals grade onto a giant supertanker called the Scorpius on Saturday, according to tanker tracking data compiled by Bloomberg. The operation was completed about 35 hours later.
Russia’s invasion of Ukraine has caused severe complications to the petroleum supply chain. A hugefleet of often older tankers with unknown owners has sprung up, frequently engaging in ship-to-ship cargo transfers out at sea, a practice that was called “unsafe” in a recent report by the International Maritime Organization.
The Volans, an Aframax-class ship, was constructed in 2009 and the Scorpius in 2003, an age that in years gone by would often have seen the tanker earmarked for demolition.
Almost all of the previous switches since Russia’s invasion of Ukraine took place near Ceuta, a Spanish enclave off the northern coast of Morocco, or in international waters in a bay near Greece.
Azores Switches
It’s the first time this year that a cargo has been moved from one ship to another out in the Atlantic Ocean. A small number of switches took place in the near the Azores in the mid-Atlantic last year, but those didn’t get repeated.
While ship-to-ship transfers have a good safety record, there are risks involved. Ship captains, who have discretion over when they take place, must wait for the winds to be low and the seas to be calm before doing them.
But there is an underlying commercial pressure to get the job done. If the weather isn’t right, it can mean waiting for weeks for the correct moment, racking up waiting bills for the traders involved.
Neither vessel is covered against risks like oil spills and collisions by an insurer that’s part of the International Group of Protection and Indemnity Clubs, the industry standard.
The Scorpius is a very large crude carrier, or VLCC, the industry’s largest mainstream tanker. Such ships are commonly used for longer-distance deliveries.
Typically, VLCCs can carry the cargoes of three of the Aframaxes most commonly used to load crude at Russian ports, improving the economics of long-haul deliveries to China.
Scorpius already took a cargo from the Aframax tanker Thea off Morocco on April 8-9. Another vessel, the Nurkez, currently off Portugal, appears to heading toward the Cape Verde islands and may become the third to transfer cargo onto the Scorpius.
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