Sovcomflot transfers ships to new management firm to boost trade

Russia-based state-controlled tanker group major Sovcomflot (SCF) has transferred dozens of ships into a new management company, based in Dubai, as an attempted get-around in the face of growing -pressure from ever-tougher sanctions causing greater financial restrictions, reports Reuters, citing maritime industry data and shipping industry sources.

SCF itself is subject to sanctions and other restrictions by the UK and the EU. The US has restricted its financial activities.

SCF has a fleet of about 80 vessels, including crude, oil products and liquefied natural gas tankers. It has already had to rebase its overseas operations from Cyprus to Dubai.

Since July, 45 tankers have transferred to Dubai-based Oil Tankers SCF Mgmt Fzco, according to data on Equasis. Some of the vessels retained separate management services with Sun Ship Management, the data showed. Sun Ship Management was separately designated by the EU and the UK earlier this year.

The UK has asserted that Sun Ship Management was an entity connected to Sovcomflot

The SCF-operated tanker fleet has not called at EU or UK ports since the early spring of 2022 and all ties with clients in those jurisdictions were terminated at that time, SCF said in a statement to Reuters.

The additional restrictions imposed on Sun Ship Management as one of SCF’s subsidiaries in February 2023 “did not add much”, it said, in the first confirmation to Reuters that Sun Ship Management was part of the group.

“Established back in 2012, Sun Ship Management (D) Ltd continues to manage a large number of SCF vessels and remains an important member of the group,” SCF’s statement said, adding that “at the moment as part of internal reorganization efforts, the company is allocating its fleet to different technical supervision teams depending on the trading geography, clients portfolio, vessels’ age and commodities transported”.

Sovcomflot said that this corresponded to SCF’s historical mode of operations, “with several technical managers working under respective recognized brands.”

Trade and shipping sources told Reuters that the new management company in Dubai was part of efforts to separate SCF and other entities that had been subject to sanctions-related designations.

“Russian tankers are unable to get spare engine parts as the Western engine makers have pulled out and they face more difficulties like this,” one Western shipping industry source said.