Prior to the implementation of the G7 oil price cap in December 2022, a significant shift in vessel ownership occurred, involving the transfer of ownership from direct Russian entities to new companies based in India and the United Arab Emirates (UAE).
These newly established tanker owners have formed fleets of vessels that maintain direct and indirect connections to Russian entities, while maintaining a certain level of opacity regarding their ownership structure, particularly in terms of identifying the ultimate group owner. As a result, these new owners have played a crucial role in ensuring the uninterrupted flow of Russian oil, filling the void left by more conventional fleet owners who exited the Russian market.
The issue of vessel ownership and the challenge of identifying the true beneficial owner have gained considerable attention since the implementation of the oil price cap. Notably, the European Union has recently placed Sun Ship Management under scrutiny and included it on a sanction watch-list due to its association with Sovcomflot, a Russian fleet owner that transferred assets to Sun Ship Management, a ship owner based in Dubai. Additionally, two other fleet owners, Gatik Ship Management and Fractal Marine, have emerged as newly registered ship owners in India and the UAE, respectively.
These companies have taken over vessels that were previously flagged or managed by Russian entities. However, it is important to note that neither Gatik Ship Management nor Fractal Marine represents the ultimate owner of these assets, and uncovering the true ownership behind these entities remains a challenging task.
- In 2022, 864 newly established companies were created in the maritime industry with an association or relationship to Russia
- From the 864 new organizations, 87 of these contain vessels that were previously Russian owned or Russian flagged
- 23 of the 87 maritime companies are located in the UAE. Turkey, Singapore and the Seychelles make up a significant portion of the remaining total
- The other 777 companies have vessels within their fleets that have made Russian port calls since Dec. 5, 2022. The number of unique vessels involved in these port visits is 880
- Vessels making Russian port calls for the first time since Dec. 5, 2022 are primarily associated with fleet owners located in Turkey, China, Greece, Hong Kong and UAE
- The issue of vessel ownership as a risk factor is heightened when analyzing the unknown group owners of the 880 vessels making Russian port visits. 511 have no ultimate group owner listed
- 83 companies located in India are working directly with Russian shipping assets or own vessels making Russian port visits, 44 of these were established and setup in 2022
- Gatik Ship Management has evolved into new registered companies in April and May 2023 with a number of these vessels incorporated into new entities outside India
- The Gabon flag has dramatically increased the number of tanker vessels under its registration in April and May 2023, these flag changes have occurred at the same time as the Gatik Ship Management ownership changes
- 98% of the Gabon flagged tanker fleet greater than 10,000 DWT is either subject to Russian shipping sanctions or has an unknown beneficial group owner
Among the 864 vessels, the primary Russian association can be traced back to a port call following the implementation of the first crude oil price cap in December 2022. However, some companies on the list of 864 organizations have obtained previously owned or flagged Russian vessels. Notably, there are 87 companies that have acquired these ex-Russian vessels without necessarily making Russian port visits. The United Arab Emirates stands out as the leading location for registering such maritime assets that were previously owned or flagged by Russia.
To put it into perspective, the establishment of maritime companies in 2022 with a direct connection to Russia represents approximately 12.8% of the total of 6,789 newly formed firms.
A total of 100 vessels linked to these newly established companies were originally flagged or owned by Russia.
Russia’s Shadow companies based in the United Arab Emirates
Among the 23 companies established in the UAE in 2022, they collectively manage a fleet of 53 ships. This includes the notable companies Fractal Marine and Wanta Shipping that have been previously mentioned and emphasized.
The group of 28 tankers listed here has a combined capacity to transport approximately 21.2 million barrels of oil. The identity of the ultimate group owner of these tankers is largely unknown, with 57% of the 28 tankers having an unspecified beneficial owner. In cases where a group owner is specified, such as an Abu Dhabi-based owner established in 2002, multiple registered owners are listed within the overall group structure, overseeing a variety of vessels including VLCCs, ferries, and yachts. Many of the tankers registered under these owners do not have a history of making port visits in Russia, but instead operate routes between the Persian Gulf and East Asia. The larger tankers in the fleet have previously changed ownership between well-known Russian companies like Sovcomflot and Sun Ship Management.
Among the 100 companies established in the UAE in 2022 with a Russian connection, several have registered owners located in the Marshall Islands. These registered owners predominantly manage fleets consisting of a single ship and are often associated with brass plaque firms in the UAE or registered under “care of” addresses. Multiple subsidiaries and third-party entities are utilized to obfuscate ownership structures and create distance between different levels of ownership and the ultimate group owner.
The UAE has another 77 companies located in the country with ships in their fleet making Russian port calls for the first time since December 5, 2022. These are vessels that were not previously Russian flagged or owned. The number of ships in this category is 102. 59 of these 102 vessels are within the tanker fleet, with its breakdown by ship category type heavily weighted across the Aframax and MR2 classification.
Maritime companies based in the UAE, which were established before 2022, have also formed new associations with Russian shipping. There are a total of 60 companies that have acquired vessels previously flagged or owned by Russia. Among these, 25 companies still maintain a Russian nationality of control, while the rest are primarily controlled, registered, and located within the UAE. Moreover, out of the 60 firms, 44 have been established as registered owners of vessels with only a single ship in their fleet. It is worth noting that these registered owners often have a “care of address” or third-party management that can be traced back to Sun Ship Management (linked to Sovcomflot) or other well-known Russian entities.
In the UAE, there are five major companies that operate and control more than five vessels: Al Seer Marine Supplies, Koban Shipping, Sun Ship Management, Fractal Marine (with ultimate control based in Switzerland), and Wanta Shipping.
Unclear Company Relationships
Understanding the current ownership and management of previously held Russian shipping assets is crucial. Capital Maritime and Trading, a company under Greek control, recently acquired three crude oil tankers in March 2023 that were previously owned by Russians. Capital M&T’s ultimate group owner, also based in Greece, includes ten other firms, two of which were established in 2022 and now control two of the acquired vessels since March 2023. This registered owner has a deeper relationship through third-party management and a “care of address” with Sun Ship Management, the former home of the ex-Russian Sovcomflot fleet. The three newly acquired vessels are technically managed and registered in Singapore. Executive Ship Management oversees 131 ships and a total of 47 subsidiaries, third-party management firms, or “care of addresses” within its relationship hierarchy.
Maritime companies with intricate and complex trading relationships present challenges in understanding risks and ownership. Despite operating under known group owners, companies like Capital M&T and Executive Ship Management still maintain opaque relationships that require detailed knowledge for identification. In the case of these two firms, there are multiple levels between the group owner, subsidiaries, registered owners, and technical owners before a positive identification can be made regarding the known owner or determining where risks may lie within the wider fleet.
Name and Business Address Relationships
Hidden group ownership, combined with suspicious shipping activities, has resulted in the withdrawal of insurance services from specific ships within the Gatik Ship Management fleet. Gatik, the registered owner of multiple vessels affiliated with Russia, had its insurance with the American P&I club terminated in mid-April 2023. There has been extensive discussion about Gatik and its sudden entry into the world of maritime ownership. It is estimated that the Gatik fleet consists of approximately 56 ships, all acquired in 2022 when the company was initially established.
The relationship between Gatik and Russian shipping assets offers insights into how shipping management firms can obscure the ultimate group owner. Gatik is among the 44 companies established and located in India in 2022 that now engage in Russian shipping or oil activities. This includes purchasing previously Russian-flagged or owned assets and making port visits to Russia after December 5, 2022. To provide a broader context, there were 39 established Indian companies operating under the same criteria of Russian port calls or vessel acquisitions before 2022. Gatik Ship Management encompasses 37 individual registered owners, third-party entities, or “care-of” associations, many sharing the same address at the Neptune Magnet Mall in Mumbai, India, and having name variations such as Girik Ship Management. This expands the Gatik Ship Management fleet of vessels and, ultimately, those within the group owner fleet of Buena Vista Shipping beyond the initial estimate of 50 or 60.
Additionally, it is worth noting the ongoing and evolving nature of the ownership structure within Gatik Ship Management. In April and May 2023, several previously registered Gatik vessels were transferred to seven new companies with different registration names and locations. Some of these entities remain in India, while others have relocated to the UAE. The UAE companies managing these ships have convoluted relationships with the British Virgin Islands. In total, 30 vessels previously owned by Gatik have moved to new group-owned companies, and a significant number of them have obtained the flag of Gabon.
One of the newly established shipping companies is Gaurik Ship Management, registered in Navi Mumbai, India. Since its inception in 2023, it has managed the vessel Onrim (IMO: 9402732), a VLCC flying the flag of Gabon. The Onrim does not have recent Russian port calls in its history but the vessel has a significant record of ship-to-ship (STS) transfers with Russian-owned ships and multiple occurrences of dark activity (when the ship does not appear on AIS). The Onrim operates between India and South Korea or Malaysia, where it conducts STS operations with shuttle tankers that have previously carried Russian crude from Kozmino or Nakhodka.