Increase in Ship-to-Ship Loadings for Russian Diesel in Northern Aegean

As Western sanctions increasingly target vessels transporting fuel loaded at Russian ports, traders are shifting Russian diesel cargoes to a new ship-to-ship (STS) loading site in the northern Aegean Sea, as reported by LSEG and various market sources.

Following the European Union's complete embargo on Russian oil product imports, which was implemented in February 2023, traders have redirected diesel exports from Russian ports to destinations such as Brazil, Turkey, and various nations in Africa and Asia, in addition to utilizing STS loadings.

The use of STS loadings complicates traceability for Western nations attempting to monitor the trade of Russian oil products.

One of Europe’s prominent STS loading locations for Russian oil products is now in international waters near Greece's Laconian Gulf. This location is strategically situated close to Russian ports and the Suez Canal, facilitating access to Asian markets.

In April, Greece issued two notifications regarding military exercises in the Laconian Gulf, advising merchant vessels to steer clear of the area. Consequently, tankers transporting Russian oil products shifted from the waters off southeastern Peloponnese, primarily to Malta and Port Said in northern Egypt.

According to LSEG data, in July, a minimum of four vessels carrying approximately 123,000 metric tons of diesel and gasoil were transshipped from Russia’s Black Sea ports of Taman and Tuapse to neutral waters south of the Greek island of Chios.

Additionally, traders and shipping data indicate that three vessels loaded with about 100,000 tons of gasoil from Tuapse are currently en route to STS operations south of islands in the northern Aegean this August.

The recent uptick in STS activities may also be influenced by new EU sanctions, market sources speculate. In June, EU member states implemented a fourteenth sanctions package aimed at curbing the so-called shadow fleet of foreign vessels transporting Russian oil products.

Currently, Russia is reportedly exporting around 3.5 million metric tons of low-sulfur diesel and gasoil monthly, with approximately 0.8 million tons sourced from Tuapse and Taman, according to LSEG data.