Treasury Department’s hunt for Russian oil sanction violators on the seas is intensifying
A Russian-chartered oil tanker in the sea off Morocco in an area identified by maritime technology company Windward as a hub for smuggling oil.
Europa Press | Getty Images
The U.S. Department of the Treasury’s Office of Foreign Assets Control announced three vessels and shipping companies being sanctioned for violating the Russian oil sanctions on Thursday, only a few days after Treasury began a separate, larger probe of approximately 30 ship management companies covering 100 vessels suspected of violating a price cap on Russian oil.
“Shipping companies and vessels participating in the Russian oil trade while using Price Cap Coalition service providers should fully understand that we will hold them accountable for compliance,” said Deputy Secretary of the Treasury Wally Adeyemo in a statement on Thursday. “We are committed to maintaining market stability in spite of Russia’s war against Ukraine, while cutting into the profits the Kremlin is using to fund its illegal war and remaining unyielding in our pursuit of those facilitating evasion of the price cap.”
But as the Treasury seeks to cut off the Kremlin’s access to oil profits, its hunt for crude tankers and shippers violating OFAC guidelines is revealing complexities in its own guidelines and a murky marine industry.
The shipping entities identified on Thursday were United Arab Emirates-based. The vessels were Kazan Shipping Incorporated’s Kazan, Progress Shipping Company Limited’s Ligovsky Prospect, and Gallion Navigation Incorporated’s NS Century. But while those ships are now UAE-based, Matthew Wright, lead analyst of freight at marine intelligence firm Kpler, tells CNBC the location of where the company is based may be different from the location of the beneficial owner. In this case, Wright says the beneficial owner is likely still Russian-based.
“Based on the history of these fleets, these vessels were all owned and operated by Sovcomflot,” Wright said. “Management of all the Sovcomflot ships was transferred to Sun Ship Management in March/April 2022 when their offices in Europe were closed. Those three companies are now managed by a new manager called Oil Tankers SCF Management but it’s just another name. Ownership hasn’t changed since 2006. They’re not part of either the dark or grey fleet really as I consider them still Russian-owned.”
30 ship owners targeted in new Treasury probe
This is just one example of the murkiness within the Russian oil trade. The probe against 30 shipowners begun earlier this week reveals how identifying and finding proof of vessels traversing the oceans with sanctioned oil is not as straightforward as suggested by initial headlines covering the Treasury allegations. These companies received warning letters from the government about activity deemed suspicious and requests for documentation. There are grey areas in the U.S. government’s Russian oil guidelines, though the efforts can ultimately lead maritime investigators to the truth.
In the U.S. Treasury’s “Preliminary Guidance on Implementation of a Maritime Services Policy and Related Price Exception for Seaborne Russian Oil,” ship owners are under a Tier 2 category. According to the Treasury, this group within the maritime industry are “actors who are sometimes able to request and receive price information from their customers in the ordinary course of business.”
If a ship owner is unable to obtain such pricing information, according to the Treasury’s guidelines, the Tier 2 actors (ship owners) need to request “customer attestations” where their charter customers pledge in a document they will not purchase seaborn Russian oil above the price cap.
This document could provide a “safe harbor” for ship owners who are relying on that customer’s “attestation” to comply with sanctions. This safe harbor is also extended to the ship insurance companies.
“Ship owners rely on the charterer to provide ample proof that the Russian oil on board the vessel has been sold below the price cap,” said Andy Lipow, president of Lipow Oil Associates. “The sanctions can easily be circumvented if a dishonest charterer presents documents that falsify the true cost of the oil.”
Lipow said one clue to suspicious paperwork is a price of oil that is well below the market, selling Russian crude oil in Asia today at $50 per barrel when Brent is trading at $80.
“That is a red flag,” Lipow said.
Based on the safe harbor, if the ship owner or management company can be absolved of wrongdoing, the documents can still lead Treasury to the charterer.
The U.S. Treasury told CNBC it does not comment on current investigations.
Tracking Russian oil
A breakout of the Russian oil trade by Kpler shows around 30% of Russian exports from Western ports are still using commercial shipping with beneficial ownership within the European Union.
Wright said this “dark fleet” is comprised of vessels typically 20 years and older which have loaded or predominantly loaded Venezuelan or Iranian cargoes in the last few years.
“There is often some evidence that they have been disguising their activities by turning off their AIS, but not in all cases,” said Wright, referring to the automatic identification system used by marine vessels to track location. “Ownership is often opaque and the operator does not engage in standard commercial shipping outside of operating these vessels.”
There are also “grey fleet” vessels sold since the Russian invasion of Ukraine with the aim of transporting Russian exports and avoiding sanctions. These vessels, according to Wright, have had EU ownership.
“Most vessels have been sold by owners based in Europe to owners who were not previously active in the tanker market,” he said. “The owners are based mainly in Hong Kong, China, India, and the UAE.”
The price cap rules state that exports of Russian crude or refined products on EU-owned, insured, or serviced tonnage must be below the relevant price cap.
Since July, Wright says most exports from Russia are assumed to be above the caps, yet a large number of ships from within the EU continue to trade. This is because of the way Russian crude is traded.
“It is very likely vessels loading Russian cargoes that are EU-owned will have documentation showing a crude trade below the price cap, even if the cargo was actually traded above the price cap,” Wright said. “This is because a charterer or middleman will have traded it at a price that can be shown to the owner as part of a wider trade with the final buyer. The (vessel) owner is unlikely to have any evidence to the contrary.”
Vessel owners do not produce these documents, he said, but are provided with these documents by the charterer.
“The vessel owners are merely the custodians of information provided to them,” Wright said.
Beks Shipmanagement & Trading confirmed to CNBC it is among the companies that received warning letters from the Treasury this week and is sending documents to the government. The company had been identified in earlier press reports, though Treasury declined to specify companies to receive letters.
In an email to CNBC, the company rejected the Treasury’s allegations. “Despite the fact that the U.S. Treasury Department requested voyage details from 30 different ship management including 100 vessels, it is an obvious bad faith and reputation damaging purpose that only our management company was mentioned in the news recently circulated in the media,” a Beks spokesperson wrote.
The company, based in Turkey, announced in October the deployment of SpaceX’s Starlink satellite connectivity system across its fleet of 40 bulkers and tankers for enhanced vessel tracking.
“Our vessels are traded worldwide with their tracking system always switched to the on position. We employ our vessels by abiding (by) all international laws and regulations without breaching any sanction regime,” the company wrote in the email.
Beks said it has been conducting due diligence procedures on all of its voyages as well as carrying out the necessary sanction checks with its London-based lawyers.
According to Kpler, Beks Shipmanagement’s fleet had numerous tanker port calls to Russia since the start of sanctions on February 24, 2022. One example is the oil products tanker Bek Aqua.
Kpler was able to track the travel of the tanker using the tanker’s satellite beacons through the AIS short-range coastal tracking system currently used on ships.
The tanker Beks Aqua arrived at the Russian Port of Nakhodka on Oct 26 and was loaded with either diesel or Naptha on November 1. The vessel then arrived at the Port of Singapore on November 10 and departed empty on November 14.
But following the satellite data doesn’t allow for understanding of contract prices.
“While we can track the vessel’s journey from Russia to Singapore, unless we have the sales contract, we do not know the price the oil product was purchased for,” Lipow said. “The only fact we have is companies like Beks Shipping are employed to move Russian oil. It is possible that someone filed false paperwork with the shipowner. This is why tracking the Russian oil sanctions is not straightforward,” he said.
Beks Shipmanagement said the requested voyage details will be provided to the U.S. Treasury with full transparency.
Tesla opened its retro-futuristic “Tesla Diner” last Monday, July 21st. It’s a cool concept and the realization of a plan that was first talked about in 2018… but in the 12 days since it opened, it hasn’t been all roses so far.
The diner has been through a few twists and turns since it was first proposed by Tesla CEO Elon Musk on a conference call in 2018. At first, the plan was to build it alongside a Supercharger location in Santa Monica, but the restaurant portion didn’t get off the ground and Tesla just build a Supercharger location there instead.
Then Tesla moved the project to Hollywood… on Santa Monica Blvd. So, kind of still Santa Monica, right? It took the place of an old Shakey’s Pizza, and has been under construction for quite some time.
The plans were to offer a diner with a Supercharger, carhop service, large drive-in movie screens and a retro-futuristic aesthetic around it all. It opened on July 21st, at 4:20pm (420 being a reference to Musk’s reported drug addictions), delivering all that, along with a merchandise shop and one of Tesla’s Optimus robots serving popcorn.
Pretty much immediately, the Diner had quite a festive atmosphere. The line to get food has reportedly consistently been an hour or more long since it was opened, which speaks to the site’s popularity – but perhaps also a failure to provide the kind of rapid service that a fast casual diner with car service might seek to offer.
Given that the site is also a Supercharger, one would expect to have a premium on fast service, so that cars don’t end up parked in spots for too long which could otherwise be used for fast charging (Tesla charges idle fees for EVs which charge for too long and clog up chargers, but we’ve heard conflicting information over whether these idle fees apply to people waiting for food at the Diner)
One remedy for these long lines, though, is Tesla’s in-car computer, which cleverly allows drivers to order food from inside their car ahead of time while navigating to the site. Tesla then knows when the driver will show up, based on in-car navigation, and theoretically can have the order ready by then – but perhaps that will become more relevant once lines die down.
In theory, it definitely does seem like a “Supercharger done right.” We’ve covered several instances of these, charging plazas that aren’t just a place to charge, but which offer other amenities that drivers might want while charging – like ROVE’s Santa Ana “full service” charger with grocery store, lounge and car wash; or Rivian’s “Outpost” locations. And we definitely want to see more of this, giving people things to do while they’re charging, which can lead to electric roadtrips feeling even better than gas ones.
But so far the Diner hasn’t been without its problems, and we’ve heard a number of them in the past 12 days.
Some of the problems Tesla Diner has seen since opening
Both during construction and now that the site is open, many of the site’s neighbors aren’t particularly happy, according to a 404 media article including several interviews. An apartment block directly beside the site has seen significant turnover and vacancies as renters were fed up with years of construction, operating 14 hours a day, and loud generators that also emitted polluting exhaust.
Residents in the article were afraid to use their full names, lest they be exposed to abuse by Tesla fans as a result – something that we at Electrek can attest to, having received similar responses after writing truthful articles about the company.
Some renters have had their windows blocked by the 40-foot-tall movie screen, and while the screen doesn’t produce sound itself (that’s piped through vehicle speakers), it does have fans on the back of it which make a constant whir – thus blocking their view and adding noise pollution.
And since the diner is open 24/7, there’s no reprieve from the hustle and bustle, which has also caused traffic backups along the small nearby streets and has forced the apartment building to reinforce its entry door.
Much of this could be blamed on the planning commission, perhaps, for allowing the project to go on as-is – assuming Tesla was upfront about the site’s uses. And some of the chaos will calm down once the novelty of the site goes down, and some noise is to be expected for those living in a relatively busy part of the LA area in the first place. One resident did say they liked the hustle and bustle, but according to the article, this resident seems to be in the minority.
Beyond the planning issues and busy nature of the site, there have been several operational issues so far.
On the very first day, Tesla’s popcorn-scooping Optimus robot failed. Tesla has touted its expertise with “real-world AI,” using its Optimus robots as an example, showing the robot’s dexterity and ability to do factory tasks. But the problem is, in most public displays of the robot so far, it has been teleoperated – that is, remote controlled by a human. Reportedly, Diner employees confirmed that the popcorn-bot was teleoperated, despite doing quite a simple and repetitive task.
The robot also has multiple tenders – videos show Diner employees handing popcorn containers to it, as it can’t separate the containers itself, and having to refill the popcorn machine and clean up any dropped popcorn. Combine those employees and the reported teleoperator for the robot, and this feels like we’re seeing a decrease in labor efficiency here, rather than an increase.
One widely-shared report showed perishable items stacked outside – but given that it was just a single photo, it seems likely that these items were mid-delivery.
More concerningly, TMZ reported that a woman was struck on the head by an awning/umbrella, and her husband claimed that she appeared confused and briefly lost consciousness afterwards. The LA Fire Department responded and the woman left the scene without an ambulance.
And of course, as is the case with anything Tesla these days, the Diner has attracted controversy. In Los Angeles – a city which is currently being occupied by nazi-like goons who are demanding that residents show their papers lest they be kidnapped and potentially shipped to a death camp – the man who last year became the largest individual global funder of the fascist regime that is now causing these illegal disappearances is not very popular. And you don’t have to go far back to remember when Musk himself said that his current actions are “not good for America or the world.”
Tesla locations in the LA area (and around the globe) have been subject to routine “Tesla Takedown” protests for months, starting after Musk did two clear nazi salutes and had spent his first few weeks in an advisory role in which he recommended that the US government haphazardly and illegally cut thousands of important jobs, increasing government chaos and ballooning the US deficit.
The protests also note Musk’s recommendation to cut USAid, an incredibly effective and relatively inexpensive international soft power program for the US, cuts of which are projected to cause millions of deaths globally (USAID is credited with saving 91 million lives from 2001-2021).
On the Diner’s first day, a lone protester showed up, a harbinger of things to come. Then, on it’s first weekend, the protest became much more significant – with protesters erecting two “wacky waving inflatable arm men” designed to look like Musk and repeatedly mimic his nazi salutes.
Another protest is scheduled for later today, starting at 4PM, and Tesla Takedown plans to protest from 4-7pm every Saturday and Sunday until further notice.
Finally, one video called the whole thing, and particularly the long line for dining, a “disaster.” It pointed out the difficulty a new Ioniq 6 owner was having with operating his Tesla app to grab a Supercharge (Tesla’s network is now open to Hyundai EVs). This did not appear to be a site-specific problem, rather an issue with the Tesla app as best we can tell, but the frustration of all the traffic chaos must not have made attempts to find a solution any easier.
While Tesla does have a spotlight on everything it does, this seems like a significant collection of difficulties and unforced errors for less than two weeks of operation (hmm, where have we seen something similar before…). Let’s see if they’re able to iron out the kinks.
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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Solar panel recycler SOLARCYCLE and Arizona State University just proved that solar panels made with recycled glass work just as well as new ones.
In a new collaboration with Arizona State’s Ira A. Fulton Schools of Engineering, the solar recycling company created a prototype solar panel – what they call a “mini module”– using 50% recycled glass pulled from end-of-life solar panels. The mini module matched the performance of panels made entirely with new materials.
The research was led by Dr. Zachary Holman, Arizona State’s vice dean for research and innovation, and his team. Researcher Kate Fisher built and tested two sets of panels: one using only new glass, and the other using a 50/50 mix of new and recycled glass cullet. The recycled material came from panels processed using SOLARCYCLE’s technology.
Using industry-standard power conversion efficiency tests, the results were clear: There was no statistically significant difference in how the two types of panels performed.
“This is exactly the kind of result we hope for when industry and academia collaborate,” said Holman. “Together, we proved that you don’t have to sacrifice performance to build solar panels more sustainably.”
This isn’t just a one-off science experiment. SOLARCYCLE says the recycled-glass panel is part of a bigger plan to make solar manufacturing more circular – and less wasteful. The company plans to build a solar glass factory in Cedartown, Georgia, next to its existing recycling factory. It’ll be the first in the world to use recycled cullet like this at commercial scale.
“By proving we can manufacture new solar panels using recycled materials that produce at peak performance levels, we’re taking a major step toward making the solar industry more sustainable, scalable, and self-reliant,” said SOLARCYCLE’s CTO and co-founder, Pablo Dias.
Read more: SOLARCYCLE’s new plant will recycle 25% of all US end-of-life solar panels in 2030
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them. Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
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