Smooth sailing for US-sanctioned vessel carrying Russian crude oil

A US-sanctioned vessel carrying Russian crude oil, expected to reach India’s coast in two days, is unlikely to face any debar instructions from the Indian government.

Senior officials across multiple ministries, who are aware of the matter, told Business Standard that the Centre is not expected to issue instructions to debar the vessel from docking.

“So far, no instructions have been received to debar this particular vessel,” a senior government official said.

Last week, Director General (Shipping) Shyam Jagannathan said that the regulator will await word from the Ministry of External Affairs (MEA) as the existing regulations around port entry do not cover internationally sanctioned ships.

He added that the Centre was empowered to decide on this.

According to reports, the vessel, NS Century, is one of the three that has regularly been shipping Russian crude oil to India. It is expected to reach India’s Vadinar Port in Gujarat on Saturday. Vadinar Port is a non-major port.

Major ports are owned by the central government, and non-major ones are operated by private players and state governments through their respective state maritime boards.

Losing battle

Since December 5 last year, the Group of Seven (G7) nations — namely the US, Canada, France, Germany, Italy, Japan, and the UK — have prohibited Western shipping and insurance companies from dealing in Russian crude sold at or above a $60 cap. This was implemented concurrently with a separate ban on Russian seaborne crude and refined shipments by the European Union (EU) nations.

Earlier this month, the US Department of the Treasury sanctioned several maritime companies flouting the oil cap. International media subsequently reported that NS Century, along with two other ships — Kazan and Ligovsky Prospect — are named in the list. All three ships are Liberian-flagged.

“No discussion has taken place until now on whether to debar any of these vessels,” said a Ministry of External Affairs official.

The Western allies hope to financially squeeze out Moscow, which has continued to benefit from soaring energy prices and cut off its means of financing the invasion of Ukraine. However, that has remained only a possibility as the war in Ukraine rages on.

The average price of the Urals crude, Russia’s main export grade, crossed $60 per barrel in July. The average landed price for Russian crude in India remained above $80 per barrel in September.

India, being the second-largest oil importer globally, has been requested multiple times to join the price cap.

“Any artificial changes to the established global price mechanism may have unintended consequences later. India has always weighed its options in this regard and taken the decision not to implement the cap,” another official said.

Over the past year, the flow of crude from Russia has become murkier, with large dark fleets with untraceable operators emerging. These often transfer their cargo to other vessels on the high seas to evade punitive actions at ports.

People in the know said vessels hit by Western sanctions have often taken recourse to such tactics.

NOT IN THE DOCK          
 

Sanctioned vessel NS Century set to reach India over the weekend

Two other tankers named Kazan and Ligovsky Prospect also sanctioned

The three Liberian-flagged vessels named by the US Department of the Treasury recently
All three have transported Russian crude to India in the past