Russian shadow fleet operator hit with massive losses from sanctions
Photo: Sovcomflot reported losses (Getty Images)
Russia's leading tanker group, Sovcomflot, posted a net loss of $393 million in the first quarter of 2025, Reuters reports.
The decline was caused by new Western sanctions, which led to operational problems, decreased revenue, and the idling of some sanctioned vessels.
In 2024, the United States and the European Union imposed sanctions against Sovcomflot and its fleet to reduce Russia's oil revenue, which it can use to fund its war against Ukraine.
In January, the United States added new Sovcomflot vessels to the list of sanctioned assets and withdrew a US license issued last year that had allowed certain ships in its fleet to operate despite the sanctions.
Sovcomflot, which reported a 49% year-on-year drop in first-quarter revenue to $278.5 million, said the January sanctions had a particularly strong impact, creating additional commercial and operational challenges.
The tightening of Western sanctions made fleet operations more difficult and led to lower revenue and the idling of some sanctioned vessels, Sovcomflot said in its statement.
"In the reporting period, unprecedented sanctions restrictions were imposed on the company and its vessels, which created additional commercial and operational difficulties in operating the fleet," Sovcomflot added.
According to Ukraine's Defense Intelligence, Russia's shadow fleet currently consists of up to 1,000 mostly outdated vessels (with a combined deadweight of over 100 million tons) that are used to export oil and petroleum products.
Ukraine will ask the EU to consider new large-scale steps to isolate Moscow and to impose secondary sanctions on buyers of Russian oil.
