Russian Shipping Fleet Under Threat: Analysis

With many Russian owned or operated ships now firmly under threat by many countries, it’s worth attempting to gauge the size and qualitative characteristics of this fleet. In a note yesterday, shipbroker Banchero Costa said that “following the start of Russia’s invasion of Ukraine, there have been increasing calls to sanction Russian ships and/or ban such ships from European and American ports. The United Kingdom’s Transport secretary Grant Shapps wrote last week to all UK ports asking them to prevent access to any vessels that were “flagged, registered, owned, controlled, chartered or operated” by Russian entities. The Gibraltar authorities have also banned Russian vessels from calling at the port, including for services such as bunkering. On the other hand, Dutch Prime Minister Mark Rutte has so far ruled out any such move for the port of Rotterdam. There has been mostly silence on this issue from most other European countries, up to now.

According to the shipbroker, “whilst it’s tricky for anyone to keep track of all the vessels “chartered” or “operated” by Russian entities, let’s have a look here at what dry bulk and tanker vessels appear to be owned by Russian companies or fly the Russian flag. Russian shipowners currently own 34 bulkcarriers larger than 20,000 dwt, including 2 Post-Panamaxes, 1 Panamax, 11 Handymaxes, and 20 Handies. This represents just 0.3 percent of the global bulkcarrier fleet of vessels over 20,000 dwt Of these, 15 are reportedly owned by JSC GLTK, 5 by Aston Rostov, 3 by Murmansk Shipping, 3 by Viva Shipping. Out of 34 trading bulkcarriers owned by Russian companies, just 10 units fly the Russian flag, of which 2 are Handymaxes and 8 are Handies. Russian-flagged bulkcarriers represent just 0.1 percent of the global fleet. There are currently no bulkcarriers on order for Russian companies”.

In the tanker segment, it appears that “Russian shipowners currently own 64 crude oil tankers larger than 60,000 dwt, including 2 VLCCs, 13 Suezmax, and 49 Aframax. They also own 46 product tankers larger than 30,000 dwt, including 6 LR2s, 7 LR1s, and 33 MRs. This represents just 3 percent of the global crude tanker fleet and 1.5 percent of the global product tanker fleet. Out of 110 trading tankers owned by Russian companies, 97 are reportedly owned by Sovcomflot. The second largest is Rosneft with just 4 units. It’s important to notice that out of these 110 tankers, just 8 units fly the Russian flag (1 of them is a VLCC, 5 are Aframaxes, and 2 are MRs). All the rest of the Sovcomflot and Rosneft fleet fly flags of convenience (mostly Liberia, a few Cyprus flag). Therefore, just 0.2 percent of the global tanker fleet flies the Russian flag. In terms of orderbook there are currently 2 Suezmaxes, 9 Aframaxes, and 3 MRs on order for Russian shipowners. Of these, 7 are by reportedly by Sovcomflot and 7 by Rosneft. Of these, 3 are on order at Hyundai Mipo (the MRs), 2 at Samsung Heavy (the Suezmaxes), and 9 at Zvezda SSK in Russia (all the Aframaxes). The current focus on Handy bulkcarriers, Aframaxes and MR tonnage makes sense in the context that most commodity shipments from Russia are currently short haul”, Banchero Costa noted.

Meanwhile, “about 50 percent of Russia’s coal exports are shipped from Russia’s Far East ports and shipped largely to Northern China, Japan, and South Korea. The other 50 percent is loaded at European ports in the Black Sea, the Baltic Sea, or from Murmansk, and mostly shipped to the European Union or Mediterranean destinations such as Morocco, Israel and Turkey. Russian grain exports are mostly loaded in the Black Sea and shipped to Mediterranean and Middle Eastern destinations such as Turkey and Egypt. 54 percent of Russian crude oil exports are shipped to the European Union, plus another 5 percent to Turkey, all from ports in the Baltic Sea and Black Sea. Another 25 percent of Russian crude exports are shipped to China, South Korea and Japan, and all of these shipments are again very short haul shipments from ports in Russia’s Far East such as Vladivostok, Kozmino, and Nakhodka”.

The shipbroker added that “overall, 40 percent of Russian crude oil exports are loaded in Novorossyisk in the Black Sea, 30 percent are loaded in the Baltic Sea ports like Primorsk and Ust Luga, 24 percent are loaded in the Russian Far East, and just 7 percent are exported from Murmansk or the Arctic coast. It’s worth underlining that the distance from Russia’s Black Sea / Baltic Sea ports like Novorossiysk and its Far East ports like Kuzmino is roughly 10,000 kilometers, so re-routing the oil via pipeline directly to Asia is pretty much unthinkable. The same reasoning applies for clean products trades. As much as 58 percent of Russian clean product shipments are currently sent to the European Union, another 8 percent to the UK, and 6 percent to Turkey. Hence, about three quarters of Russian clean product exports are to Europe or the Mediterranean region, and are shipped on MR tankers”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide