Russia’s Sovcomflot tanker operator complains that US sanctions have slashed profits
Pravda Ukraine
Russia’s largest tanker operator, Sovcomflot, has blamed Western sanctions for a dramatic fall in profits in 2024 and warned that new restrictions imposed this year will put additional pressure on the company.
Source: Reuters
Details: In 2024, the US and the EU imposed sanctions on Sovcomflot and its fleet in an effort to reduce Russian oil revenue that can be used to fund the war against Ukraine.
Sovcomflot, which is owned by the Russian state, has reported a 55% drop in net profit for 2024 to US$424 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) has fallen by 34% to US$1.01 billion, while revenue has declined by 19.3% to US$1.87 billion.
Western sanctions have targeted the so-called “shadow fleet” which Russia has been using to get round the G7 countries’ oil price cap.
This restriction, which was introduced at the end of 2022, prohibits Western companies from providing insurance and transport services for Russian oil sold for more than US$60 per barrel.
In January, the US added new Sovcomflot tankers to the sanctions list and cancelled a licence that had previously allowed some of the company’s vessels to operate despite the sanctions.
“New large-scale sanctions from the US [Treasury], imposed after the reporting date, have become an additional restricting factor in the company’s operations,” Sovcomflot said.
The tightening of sanctions has forced some of the company’s vessels to stand idle, which creates additional operational difficulties.
Sovcomflot also expects revenues from some ship chartering contracts to fall as a result of the sanctions.
Background: In April 2024, it was reported that the Russian company Sovcomflot had renamed some of its oil tankers after they were sanctioned by the US.
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