Who Are Secretly Buying Russian Oil? Missing Tanker Transponders Give Away 'Dark' Trade

Russian oil tankers are vanishing from tracking systems, endorsing speculations that anonymous buyers have emerged for Moscow's oil amid financial challenges. Since the Ukraine war began, Western fuel companies and shippers stayed away from Russian oil but now the crude oil is in demand and it is potentially getting some new buyers.

Maritimes risk management companies have informed that there has been a surge in the disappearances of Russian oil tankers from monitoring systems. The companies believe that transponders of ships are being turned off deliberately. They have reported a 600% jump in such dark activities after the Ukraine war began.

Malaysian oil tanker carrying arrying 900,000 litres of diesel 'hijacked off Malaysia'
Oil tanker Reuters (Representational Image)

"We're seeing a spike in Russian tankers turning off transmissions deliberately to circumvent sanctions," Windward CEO Ami Daniel told CNN, referring to oil import sanctions imposed by the US, UK, and other countries. "The Russian fleet is starting to hide its whereabouts and its exports," he added.

The US sees such dark activities as a deceptive shipping practice, which is used to avoid sanctions. According to global regulations, ships' transponders are required to remain switched on permanently. The US Treasury Department had earlier maintained that the manipulation and disruption of the automatic identification system suggest that the vessel is potentially involved in illegal or sanctioned activities and it wants to disappear from the radar.

An oil tanker unloads crude oil at a crude oil terminal in Zhoushan, Zhejiang province, China July 4, 2018. Picture taken July 4, 2018.
Representative image REUTERS/Stringer

"The ships are going dark because they are afraid if they take on Russian business, they will be blacklisted for a period of time and unable to get future business," president of consulting firm Lipow Oil Associates, Andy Lipow told CNN.

Buyers For Russian Oil Amid Ukraine War

When Russian is facing a number of Western sanctions, a major question emerges that who are the buyers of Russian oil amid the Ukraine war.

Since the war began, Russia's nearly 1.2 million to 1.5 million barrels per day of crude oil vanished in the five weeks. So far, the destination for around 4.5 million barrels of Russian oil is not known due to the turning off of transponders.

Analysts have revealed that some of the Russian oil is being bought by the refineries in India and China and in recent days there has been a surge in oil deliveries to India. Russia is also urging China to buy more oil at a discount rate.

The oil purchase by India and China comes at a time when the US and UK have banned the Russian oil import. While the European Union is still buying it as it is more dependent on Russian energy although it is in plans to cut natural gas imports by two-thirds by next year.