Russia’s oil trade is rising as record volumes of Russian crude are carried on ‘dark fleet’ vessels
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
Recent data shows the discount on Russian oil narrowing and exports increasing despite the G-7 price cap on Russian petroleum exports and U.S. sanctions.
According to Clearview Energy Partners, Russian crude prices over the last four weeks have averaged about six cents below the Brent crude price. That is far off the trading discount when the cap was first put in place. When the cap was fully phased in, in February 2023, Russian crude was selling at a 30% discount. A year ago, the discount was about 16%.
Ukraine allies, including the U.S., have banned the import of Russian crude, while a price cap imposed on Russian oil by the G7 countries, the European Union and Australia bans the use of Western maritime services such as insurance, flagging and transportation when tankers carry Russian oil priced at or above $60 a barrel to nations where a ban is not enforced.
In a recent report to clients, Clearview Energy Partners characterized the G-7 price cap on Russian petroleum exports to third countries as “increasingly loose.”
Kevin Book, managing director of research at Clearview Energy Partners, told CNBC that despite the G-7’s June and September calls for improving the price cap, and recent guidance urging parties to Russian petroleum transactions to better scrutinize cargoes, “a U.S. pinch on Russian petroleum seems unlikely until after the election.”
“A cap enforcement crackdown runs the risk of driving up crude prices,” he said. “Plus, using ‘secondary’ sanctions to enforce the cap could push reputable insurers out of the Russian crude game entirely, leaving the market to potentially insolvent stand-ins.”
Book explained that part of the narrowing of the discount is a result of Russian oil finding additional buyers, including India and China.
Record volumes of sanctioned Russian oil were carried by the “dark fleet” and known sanctioned tankers without known insurance over September, according to a recent report from Lloyd’s List.
The Lloyd’s List Intelligence unit analysis of data from energy cargo tracking firm Vortexa revealed that 69% of all crude shipped in September was carried on dark fleet tankers and 18% was carried on tankers owned by Russian government-controlled Sovcomflot. It is the most volume moved since tracking of the monthly dark fleet data began in mid-2022 (measured by deadweight capacity of vessels.) In May, 54% was recorded, the previous high.
Chinese and Indian oil traders, refiners, and port authorities were the drivers of this growth.
Lloyd’s List determines if a tanker is part of the dark fleet based on factors including if the ship is 15 years or older, is anonymously owned or has a corporate structure designed to conceal ownership, is handling sanctioned oil trade, and is using deceptive shipping practices. Its analysis showed a flurry of flag-hopping, where a vessel changes its country registration, as well as ownership and management changes amongst the vessels in the dark fleet to avoid detection.
The dark fleet data does not include Russia’s Sovcomflot or Iran’s National Iranian Tanker Co.
Its data revealed that 5% of all Russian oil in September was transported by 11 tankers, with nine of those vessels sanctioned by the UK or EU between July and September and owned by the Russian government-controlled tanker company Sovcomflot. The remaining vessels were sanctioned by the U.S. Office of Foreign Assets Control for breaching sanctions on Syrian and Iranian oil. Those vessels are the Eternal Peace and Nebulax.
Some of the Sovcomflot tankers that Lloyd’s List identified in its report were sanctioned by the UK or EU between July and September. Some tankers changed vessel names, reflagged the vessel’s origin to Barbados, or redomiciled registered ownership to Seychelles and changed their ship management to a newly incorporated UAE-based ship manager, Avebury Shipmanagement.
Greece-owned tankers have shipped 23% of oil from Russia in September, consistently over the last three months, according to Lloyd’s List. The majority of the UK- and EU-sanctioned tankers have already discharged their oil in China.
Andy Lipow, president of Lipow Oil Associates, said despite the price cap, some ship owners have decided that it was extremely profitable to have their vessels become part of the dark fleet and risk United States and EU sanctions.
“After all, Russian oil continues to be purchased by Chinese and Indian refiners with little repercussions from the U.S. or EU,” said Lipow.
A Treasury spokesperson told CNBC, “Two years since the price cap was implemented, it is unsurprising that Putin is still sinking money into building and maintaining a shadow fleet to escape the Coalition’s sanctions: that evasion costs the Kremlin, and diverts money that would otherwise be going to the battlefield. The Price Cap Coalition continues to engage with industry to ensure compliance with the price cap and to increase Putin’s costs of going outside it.”
The number of uninsured vessels carrying sanctioned oil also increased, according to Lloyd’s List, with some 201 of the 310 tankers tracked not having insurance with the 12 clubs that form the International Group of P&I Clubs. That represented 68% of the vessels when measured by deadweight, and the lowest number of tankers tracked with IG club insurance, surpassing 67% uninsured recorded in July and August.
Lipow said the oil market is pricing in a greater probability of a war between Iran and Israel that could impact supply.
“The biggest risk to the oil market is the closure of the Straits of Hormuz, and while unlikely, if it were to happen, oil prices would rise $30 per barrel,” he said. Despite the hostilities, oil prices remain under pressure, he said, as increased production from the U.S., Canada and Guyana adds to the supply picture while OPEC+ delays the restoration of its production cuts.
The increased use of dark fleet vessels comes with greater maritime safety and environmental risks.
Lloyd’s List warned in a recent note that shipping safety has become a “casualty of economic sanctions” with attempts to enhance sanctions policy leading to greater ranks of tankers determined to evade it.
Insurance giant Allianz said in May that dark fleet tankers had been linked to more than 50 accidents.
Lipow told CNBC if these vessels were to be involved in an accident that resulted in an oil spill, the owners — assuming they could be identified and found — would simply walk away, leaving the mess and subsequently the cleanup for someone else to do.
Wind energy powered 20% of all electricity consumed in Europe (19% in the EU) in 2024, and the EU has set a goal to grow this share to 34% by 2030 and more than 50% by 2050.
To stay on track, the EU needs to install 30 GW of new wind farms annually, but it only managed 13 GW in 2024 – 11.4 GW onshore and 1.4 GW offshore. This is what’s holding the EU back from achieving its wind growth goals.
Three big problems holding Europe’s wind power back
Europe’s wind power growth is stalling for three key reasons:
Permitting delays. Many governments haven’t implemented the EU’s new permitting rules, making it harder for projects to move forward.
Grid connection bottlenecks. Over 500 GW(!) of potential wind capacity is stuck in grid connection queues.
Slow electrification. Europe’s economy isn’t electrifying fast enough to drive demand for more renewable energy.
Brussels-based trade association WindEurope CEO Giles Dickson summed it up: “The EU must urgently tackle all three problems. More wind means cheaper power, which means increased competitiveness.”
Permitting: Germany sets the standard
Permitting remains a massive roadblock, despite new EU rules aimed at streamlining the process. In fact, the situation worsened in 2024 in many countries. The bright spot? Germany. By embracing the EU’s permitting rules — with measures like binding deadlines and treating wind energy as a public interest priority — Germany approved a record 15 GW of new onshore wind in 2024. That’s seven times more than five years ago.
If other governments follow Germany’s lead, Europe could unlock the full potential of wind energy and bolster energy security.
Grid connections: a growing crisis
Access to the electricity grid is now the biggest obstacle to deploying wind energy. And it’s not just about long queues — Europe’s grid infrastructure isn’t expanding fast enough to keep up with demand. A glaring example is Germany’s 900-megawatt (MW) Borkum Riffgrund 3 offshore wind farm. The turbines are ready to go, but the grid connection won’t be in place until 2026.
This issue isn’t isolated. Governments need to accelerate grid expansion if they’re serious about meeting renewable energy targets.
Electrification: falling behind
Wind energy’s growth is also tied to how quickly Europe electrifies its economy. Right now, electricity accounts for just 23% of the EU’s total energy consumption. That needs to jump to 61% by 2050 to align with climate goals. However, electrification efforts in key sectors like transportation, heating, and industry are moving too slowly.
European Commission president Ursula von der Leyen has tasked Energy Commissioner Dan Jørgensen with crafting an Electrification Action Plan. That can’t come soon enough.
More wind farms awarded, but challenges persist
On a positive note, governments across Europe awarded a record 37 GW of new wind capacity (29 GW in the EU) in 2024. But without faster permitting, better grid connections, and increased electrification, these awards won’t translate into the clean energy-producing wind farms Europe desperately needs.
Investments and corporate interest
Investments in wind energy totaled €31 billion in 2024, financing 19 GW of new capacity. While onshore wind investments remained strong at €24 billion, offshore wind funding saw a dip. Final investment decisions for offshore projects remain challenging due to slow permitting and grid delays.
Corporate consumers continue to show strong interest in wind energy. Half of all electricity contracted under Power Purchase Agreements (PPAs) in 2024 was wind. Dedicated wind PPAs were 4 GW out of a total of 12 GW of renewable PPAs.
Read more: Renewables could meet almost half of global electricity demand by 2030 – IEA
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the official unveiling of the new Tesla Model Y, Mazda 6e, Aptera solar car production-intent, and more.
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The Chinese EV leader is launching a new flagship electric sedan. BYD’s new Han L EV leaked in China on Friday, revealing a potential Tesla Model S Plaid challenger.
What we know about the BYD Han L EV so far
We knew it was coming soon after BYD teased the Han L on social media a few days ago. Now, we are learning more about what to expect.
BYD’s new electric sedan appeared in China’s latest Ministry of Industry and Information Tech (MIIT) filing, a catalog of new vehicles that will soon be sold.
The filing revealed four versions, including two EV and two PHEV models. The Han L EV will be available in single- and dual-motor configurations. With a peak power of 580 kW (777 hp), the single-motor model packs more power than expected.
BYD’s dual-motor Han L gains an additional 230 kW (308 hp) front-mounted motor. As CnEVPost pointed out, the vehicle’s back has a “2.7S” badge, which suggests a 0 to 100 km/h (0 to 62 mph) sprint time of just 2.7 seconds.
To put that into perspective, the Tesla Model S Plaid can accelerate from 0 to 100 km in 2.1 seconds. In China, the Model S Plaid starts at RBM 814,900, or over $110,000. Speaking of Tesla, the EV leader just unveiled its highly anticipated Model Y “Juniper” refresh in China on Thursday. It starts at RMB 263,500 ($36,000).
BYD already sells the Han EV in China, starting at around RMB 200,000. However, the single front motor, with a peak power of 180 kW, is much less potent than the “L” model. The Han EV can accelerate from 0 to 100 km/h in 7.9 seconds.
At 5,050 mm long, 1,960 mm wide, and 1,505 mm tall with a wheelbase of 2,970 mm, BYD’s new Han L is roughly the size of the Model Y (4,970 mm long, 1,964 mm wide, 1,445 mm tall, wheelbase of 2,960 mm).
Other than that it will use a lithium iron phosphate (LFP) pack from BYD’s FinDreams unit, no other battery specs were revealed. Check back soon for the full rundown.
Source: CnEVPost, China MIIT
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