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Indian shipping company transporting Russian oil in trouble after certification of over 20 vessels cancelled: Report Russain Oil
Representational image (Credit: Unsplash)

Indian shipping company transporting Russian oil in trouble after certification of over 20 vessels cancelled: Report

India Blooms News Service | @indiablooms | 27 May 2023, 10:56 pm

Maritime services company Lloyd's Register has informed Gatik Ship Management, a major carrier of Russian oil following the Ukraine war, that it will revoke certification for 21 of its vessels by June 3, according to a statement by the company to Reuters.

This development adds to the challenges faced by Gatik, which had to seek new flags for 36 of its ships after they were deflagged by the St. Kitts & Nevis International Ship Registry.

"Lloyd's Register is committed to facilitating compliance with sanctions regulations on the trading of Russian oil," it said in an email to Reuters. "Where supported by evidence, we withdraw class and services from any vessels found by the relevant authorities to be breaching international sanctions."

Classification societies like Lloyd's Register play a crucial role in conducting seaworthiness checks and providing certification necessary for insurance and port access.

Lloyd's Register has stated that it will revoke the classification of 11 Gatik vessels that were also certified by the Indian Register of Shipping (IRClass), the report said.

Gatik, a Mumbai-based company according to shipping databases, has not responded to requests for comment, Reuters said in its report.

In addition to Lloyd's Register, major US insurer American Club has also discontinued coverage for Gatik ships, and Russian insurer Ingosstrakh has expressed its intention not to collaborate with Gatik in the future, said the report.

The exact reasons behind the decisions of the insurers, Lloyd's Register, and the flag registry have not been explicitly stated.

During the initial four months of 2023, India imported approximately 2.76 million tonnes of Russian oil through vessels operated by Gatik, which accounted for around 10% of its total Russian oil imports.

These figures are based on tanker arrival data and calculations by Reuters.

Refinitiv data suggests that approximately 1.36 million tonnes of Russian crude oil was scheduled to arrive in India in May and June, transported by tankers associated with Gatik, although these numbers are preliminary, the report added.

Following Russia's invasion of Ukraine, Western powers introduced a restriction on the price of Russian crude, capping it at $60 per barrel.

This restriction applies to Western shipowners and insurers, who are prohibited from handling Russian crude shipments unless the price remains at or below the specified limit.

However, non-EU countries are still permitted to import Russian crude by sea. Concerns have arisen among ship insurance executives as spot prices for Russian crude exceeded the $60 per barrel threshold last month.

The executives expressed unease about potentially violating the rules due to the lack of independent means to track the value of the cargo.