Greece Is Making a Killing Selling Ships to Russia

Since Russia’s invasion of Ukraine, Greece’s mighty shipping sector has continued to earn good money shipping Russian oil. But Greek shipowners have discovered an apparently even more lucrative source of revenue: selling the ships themselves to mysterious buyers linked to Russia. One publication has declared that a “Great Greek Tanker Sale” is taking place, and no price seems too high for a secondhand tanker. But the formerly Greek ships are entering a Hades-like shadow economy.

Greek companies don’t rule many sectors of the globalized economy, but they certainly dominate shipping. Last year, the country was once again the world’s largest shipowner by deadweight tonnage. Then Russia invaded Ukraine, and Western governments ramped up their sanctions. Greek shipowners didn’t like it. “Sanctions have never worked,” Greek shipping magnate George Prokopiou told a maritime event crowd last June.

But sanctions are more effective than doing nothing, and last December the G-7 countries, the European Union, and Australia introduced a price cap that banned companies based in the sanctioning nations from trading or shipping Russian seaborne crude oil at prices above $60 per barrel. Demand for the oil remained strong, but Russian-owned tankers—which used to ship a large chunk of it—were under sanctions and struggled to transport it. Greece’s shipowners came to the rescue.

According to the Institute of International Finance’s chief economist, Robin Brooks, Greek ships currently account for almost 50 percent of tanker capacity out of Russian ports, up from 33 percent before the invasion. Companies based in countries that have imposed price caps on Russian oil are allowed to ship oil if it is priced below the cap. In Russia’s crucial Baltic Sea and Black Sea ports, seven Greek companies have collectively shipped 50 percent more Russian oil than Russia’s state-owned Sovcomflot, the Wall Street Journal reported.

But now many Greek shipowners have decided that they can profit even more by selling the ships. Sales began soaring in February 2022, and there’s “demand for tankers, for older tankers across the world, particularly in jurisdictions unencumbered by sanctions against Russia,” the trade publication TradeWinds explained. In the 12 months since then, Greek owners have sold some 125 crude and vessel carriers to the tune of $4 billion. In June, Hellenic Shipping News reported that Greek companies had sold 97 tankers sold so far this year, 25 percent of the world total.

That puts Greece in the top spot, followed by China in second position. According to figures exclusively provided to me by the consultancy VesselsValue, which tracks ship sales, Greek companies have sold 290 ships since the beginning of the war. Chinese firms are second, with 221 vessels. Russian companies have sold 57 ships, but mostly to other Russian firms or unknown buyers.

In 2022, the number of Suezmax tankers changing owners doubled compared to 2021, reaching 103, while Aframax sales rose by 30 percent, to 121. (Suezmax and Aframax tankers are the third- and fourth-largest types of crude oil carriers, respectively.) These ship types are “the ship size of choice for moving Russian cargoes,” a shipping executive told S&P Global Commodities Insight, because “not all ports in Russia can berth bigger ships.”

Post-invasion sales include the Aframax tanker Seatrust, which the Greek firm Thenamaris sold for a reported $35 million—more than three times what Thenamaris had paid for it eight years earlier. Another Greek firm has sold its four oldest crude carriers for a total of $140 million, causing a shipping executive to observe to an industry publication that “there has never been a tanker market like this.”

Despite the good news for the sellers, the generous buyers’ identities have mostly not been announced. The buyers now rushing to pay a premium for secondhand tankers are, in fact, decidedly mysterious. Companies based in the United Arab Emirates (UAE) have bought the most Greek tankers, followed by buyers in China, Turkey, and India. S&P Global Market Intelligence reports that 2022 saw the creation of an astounding 864 maritime companies with an association or link to Russia. My research assistant, Katherine Camberg, has traced more than two dozen formerly Greek-owned vessels to new owners often so obscure that they even lack a mailing address.

Despite not being known as a global seafaring hub, the UAE’s starring role in the tanker purchases is not surprising. Since Russia’s invasion of Ukraine, Dubai has established itself as “the new Geneva”—in other words, the capital for companies trading Russian oil. China has stepped up its Russian oil imports since the invasion, and Hong Kong has joined the UAE as a new oil-trading hub. Turkey, too, has increased its imports of Russian oil, and one of the Greek tankers’ known buyers is Turkey’s BEKS Ship Management & Trading. Its recently acquired ex-Greek tankers have in recent weeks been seen on the site MarineTraffic.com traveling to and from ports including Russia’s Vysotsk, Kavkaz, and Novorossiysk; Algeria’s Arzew; and Turkey’s Tuzla.

India has also massively increased its Russian oil imports, and the country is home to Gatik Ship Management, one of the suddenly active companies now doing massive business linked to Russian oil. Last year, the company went on a used-vessel buying spree, acquiring five Suezmaxes and 16 Aframaxes, as well as several smaller tankers for refined fuel and one VLCC (very large crude carrier, one size up from the Suezmax). In total, Gatik has acquired 60 ships since the beginning of the war, including a Suezmax for $42 million, an Aframax for $39.5 million, and $30 million each for at least 19 other ships, VesselsValue’s figures show. But since late spring, Gatik has transferred its tankers to “a web of related companies,” the Indian Express reported last month—“an attempt by Gatik’s benefactors to make tracking of the entire operation difficult and keeping the activity opaque.” Camberg traced some of the vessels to new owners whose only footprint is a name, if that.

Indeed, obscurity seems to be the objective. Because Russia is gradually exiting the formal world economy, which means loss of access to services ranging from capital to insurance, shipping its lucrative oil isn’t as straightforward as it used to be. The formerly Greek tankers are joining the murky fleet of secondhand ships already transporting goods to and from Russia under unclear insurance terms and often using evasive maneuvers so as not to be spotted.

What happens if one of these tankers springs a leak? Or if it collides with another vessel? Or if crew members are injured? It’s bound to happen. In May, an aging shadow-fleet oil tanker caught fire off the coast of Malaysia, injuring some crew members and leaving three unaccounted for. The tanker was owned by a company in the Marshall Islands that owns no other tankers—and lacked insurance. And last month, a seafarer disappeared off a shadow-fleet tanker transporting Russian oil to India. Nobody took responsibility for his recovery.

Greek shipowners could have done their part for peace in Ukraine by limiting Russian oil exports. Instead, they’ve made good money on oil—and now on ship sales, too. It’s not illegal, but the moguls are adding perils for sailors, oceans, and maritime wildlife, not to mention Ukraine. It’s a Greek tragedy.

Correction, Sept. 25, 2023: A previous version of this article referred to Kyklades Maritime as selling a vessel. According to Kyklades Maritime Corp., it is a ship management company only, and reference to this sale has therefore been deleted.