Sovcomflot Cites U.S. Sanctions as Profits Again Plummet in 2024
Russia’s energy shipping company Sovcomflot reported financial results on Friday, March 7, citing the continuing impact of Western sanctions on its operations and warning that the pressures on its operations were likely to increase this year. This came as Donald Trump posted on social media that he was “strongly considering” additional sanctions on Russia to push it to the negotiating table with Ukraine.
Sovcomflot told investors that Western sanctions have continued to erode its profits. The press release said, “The company's operations were subject to the influence of geopolitical factors and illegally imposed sanctions by unfriendly countries. The company continues to work systematically to minimize the negative impact of sanctions restrictions on its activities, consistently adhering to high standards of maritime safety and the quality of maritime operations.”
Among the factors cited was that some vessels had to be idled which the company said created “operational difficulties.” Operating costs for the year were up approximately 13 percent. This comes even after Sovcomflot downsized operations previously selling tankers and transferred vessels to companies outside the sanctions.
The result was that 2024 net profits were down by over half (55 percent) to $424 million. Revenues were down by 20 percent ($1.87 billion) as the company has also had to deal with the price cap imposed on Russian oil by the G7.
“New large-scale sanctions by the U.S. Treasury Department, introduced after the reporting date, became an additional limiting factor in the company's operations,” wrote Sovcomflot. It was referencing the January 10 announcement by the Biden administration. Before leaving office, Joe Biden imposed the largest sanction effort to date which included a new listing of Sovcomflot. The Treasury identified as blocked property 69 vessels, including 54 oil and product tankers and four liquefied natural gas (LNG) tankers, owned by Sovcomflot.
Donald Trump is now threatening to further increase the pressure on Russia writing on social media today that Russia is “’pounding’ Ukraine on the battlefield” causing him to “seriously consider” large-scale banking sanctions, other sanctions, and tariffs. He said if enacted the sanctions would be in place until a cease fire had been achieved and a final agreement on peace is reached.
Russia is reportedly anxious to loosen the sanctions which have placed an increasing hold on its economy. Energy products are one of the primary sources of revenue for Russia.
Video: Sanctioned Shadow Tanker Struck by Containership off Turkey
One of the mysterious tankers operating in the shadow fleet and sanctioned late last year was involved in an incident off Turkey late on Friday, March 7. Turkish authorities have not commented on the allision where the tanker was hit by a Turkish-owned containership, but it was captured on video which was broadcast on Turkish TV.
The tanker named Mia (149,686 dwt) was anchored approximately 5 miles offshore near Istanbul. The vessel’s ownership is considered to be murky with a company registered in the Seychelles listed as the owner, no known manager, and no inspections on file since 2014. The U.S. sanctioned the vessel in 2024 and cited it as being registered in Guyana. The authorities in Guyana however reported that it was a false flag as the ship has no ownership ties to the country which operates a closed registry. The U.S. Office of Foreign Asset Control also places a strong likelihood the tanker also operated under the aliases Magus and Freedom.
The videos show the Orita (8,000 dwt) striking the container ship as the vessel appears to be turning. It is a small container ship with a capacity of 672 TEU. It was built in 2005, registered in Panama, and managed by a Turkish company. The vessel’s AIS signal shows it was bound for Sulina, Romania, but it is now being held at anchor.
Media reports said the tug Efes 10 which is operated by Uzmar from Marport was first on the scene. It was used to initially cordon off the area as the Coast Guard worked to determine the circumstances.
The tanker is reported to have suffered a puncture to one of its ballast tanks and was leaking dirty water which the Coast Guard considered pollution while noting it was not oil. A larger tug, Rescue 2 from the General Directorate of Coastal Safety, later reached the area.
The crew on the tanker is reported to be working on an emergency, temporary patch. They are also working to stop the leak from the ballast tank.
There are reports of “impact marks” on the containership Orita. The reports said the Coast Guard was examining the containership to determine the extent of the damage.
Cook Islands Politicians Question Role Supporting Shadow Fleet
The Cook Islands as a registry of ships has become one of the topics of the reporting on the shadow fleet of tankers servicing the Russian oil industry. Now politicians in the small Pacific Island nation are questioning their role in the shadow fleet and how the reporting is impacting the image of the nation.
After repeated news reports highlighting vessels registered in the country, the Cook Island News reports it became the issue of questions during last week’s parliamentary meeting with the Deputy Prime Minister and Minister of Transport responding. They asserted that nothing illegal was happening, but they would investigate the allegations.
According to the newspaper, Opposition Leader Tina Browne asked the Ministry of Transport to respond to the reports that vessels registered in the Cook Islands have been “arrested overseas” on allegations of transporting arms to Russia or involvement in the shadow fleet. She cited media reports of 18 vessels having been detained, questioning if it was “giving us a very bad name out there?”
Deputy Prime Minister Albert Nichols responded saying that they had not been able to find anything on the alleged 18 vessels while noting that the names of the ships had not been supplied. The Cook Islands News reports he assured parliament that if there were any merit to the allegations “rightful steps” would be taken.
The tanker Eagle S which was detained for over 50 days in Finland after the Christmas Day incident with the undersea cables is registered in the Cook Islands. The vessel was transferred to the Cook Islands’ vessel registry in July 2023 and its registered owners are listed as a company in Dubai. In addition, the U.S. sanctioned four tankers registered in the Cook Islands in its sweeping January 2025 package.
The Ministry of the Foreign Affairs of the Cook Islands said it is well aware of the situation and is taking the global media coverage “very seriously.” The government has repeatedly denied the allegations that Maritime Cook Islands has become a haven for Russian-linked tankers. It says that they comply with international sanctions. Maritime Cook Islands is an outside manager employed to administer the registry.
The Cook Islands however maintains an open registry with the media reports stating it added over seven million DWT of tankers and became a top 30 registry in 2024. The Ministry said it had not expected the number of vessels in the registry to increase so dramatically noting it is currently over 780 foreign vessels.
They asserted that there are no illegal operators as vessels have either been deregistered or have voluntarily removed themselves from the registry. A dozen tankers were removed from the registry in July 2024 for violations. Nicholas responded to Browne asking for some time to conduct a review and said if the allegations were proven to be accurate then there would be an investigation and appropriate actions taken.
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