A shadow fleet brings oil from Russia to the world market. Their tracks also lead to Switzerland.
This content was published on Jun 02, 2023
Res Gehriger/SRF
Switzerland and around 40 other countries are sanctioning trade in Russia’s oil. They put a price cap on Russian oil to hurt the Kremlin’s revenues. Since then, new shipping companies have sprung up to help Russia circumvent Western sanctions via third countries.
Traces in Switzerland
The traces of this so-called shadow fleet also lead to Geneva, as research by the “Rundschau” shows, to a newcomer in the Geneva shipping industry: Fractal Shipping SA. Founded in February 2022, it has quickly become one of the largest Swiss tanker shipping companies. According to the European shipping database Equasis, Fractal has acquired 30 aging tankers within a year. Average age of the fleet: 15 years.
Ship position data from the company MarineTraffic shows that Fractals ships are loading oil in Russian ports on the Black Sea, the Baltic States or the Pacific. Fractal transports the oil from Russia to countries such as China or India, which have no sanctions against Russia.
According to the sanctions guidelines, this is legal if the western shipping companies can prove that they are paying Russia a price for oil that is well below the world market level: at most 60 dollars per barrel of oil – instead of the usual 80 dollars. Compliance with this price cap is checked by the reinsurance companies of the individual ships, which issue certificates for compliance with the price cap. The reinsurance business was previously in the hands of Western companies.
Shadow fleet under G7 radar
As research by the “Rundschau” shows, ships of the Geneva Fractal are all insured with the Russian company Ingosstrakh. A number of Fractal ships are also with Western reinsurers. Ingosstrakh also insures the oil tankers of the Russian state-owned shipping company Sovcomflot. States like India allow these ships to operate in their waters and call at their refineries under the cover of Ingosstrakh.
At the end of April, S&P Global Commodity Insights, an economic data service and a partner company of the UN shipping authority IMO, found that the price cap for crude oil provided for in the sanctions was generally not observed at the Russian Pacific port of Kozmino. The fractal tanker Harmonia last loaded Russian oil at this port on May 4, as the “Rundschau” shows using satellite images.
Industry insiders attribute Fractal to the Shadow Fleet. The shadow fleet operates under the radar of the G7 countries in the interests of Russia and fills the gap left by the withdrawal of well-known western oil trading companies from the Russian business.
Company does not answer
The data indicates that Fractal operates in a legal gray area. That alone does not mean that the activities are illegal. The CEO of Fractal Shipping could not be reached for a statement for the “Rundschau”. Repeated written and telephone inquiries to the company also remained unanswered.
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