How Russia benefits from Trump’s Venezuelan oil project

New data on the ghost fleet shows that a growing number of tankers are seeking protection from Moscow by changing their registered flag to that of Russia.

This trend has been further accelerated by US seizures of ships carrying sanctioned Venezuelan oil.

President Donald Trump has said US oil companies will invest billions of dollars in Venezuela’s energy sector following the overthrow of President Nicolas Maduro. Chevron, ConocoPhillips and ExxonMobil reportedly intend to meet with the Trump administration later this week. Trump too said the big oil companies will “either be reimbursed by us or through their revenues”.

“We have seen an accelerated transition of ships going under the Russian flag over the last month,” said Richard Meade, editor-in-chief of Lloyd’s List. “Seventeen Ghost Fleet tankers have fraudulently reflagged to the Russian flag in the last few weeks alone.”

One of the latest large-scale sanctioned vessels newly registered under the Russian flag is the Bella 1, the tanker that the United States detained on December 20 while in transit to Venezuela to be filled with the sanctioned crude.

During this time, the Bella 1 was registered under a false Guyanese flag. On December 31, Russia informed the United States that the ship had changed its name to Marinera and transferred its registration to Russia, according to Lloyd’s List. The ship left the Caribbean.

According to Automatic Identification System data (real-time information transmitted by ships) that Lloyd’s List tracks, the ship is now near Iceland, bound for Russia.

“This mid-voyage reflagging appears to have been an attempt by the ship’s operators to protect themselves against collision and seizure by the United States,” Meade said.

Lloyd’s List research shows another sanctioned vessel reflagged to Russia four days after the Marinera reflagged.

The ship, now called Hyperion, was originally a U.S.-sanctioned tanker that delivered Russian naphtha to Venezuela’s Amuay Bay under a false flag in December. Naphtha is the key ingredient for diluting thick Venezuelan crude so it can flow through pipelines for export. The Hyperion was also able to leave Venezuela untouched by the US blockade.

“There is no doubt that the Venezuelan risk is accelerating Russia’s acquisition of Ghost Fleet ships,” Meade said.

“All this points to a more permanent evolution of the shadow fleet, with direct monitoring and protection from Moscow,” he said.

“But what remains to be seen is how far Russia will be willing to go to protect these vessels that are all operating in sanctioned trades,” Meade said.

“We are all now waiting to see whether the United States will be prepared to directly challenge Russia by intercepting a Russian-flagged tanker,” he said.

Not all new Russian-flagged tankers have been able to leave Venezuela.

The Premier, which reflagged from Gambia to Russia on December 22, remains empty outside the José terminal in Venezuela, according to Lloyd’s List ship tracking.

“Intelligence tells us that several other vessels currently attempting to leave Venezuela are similarly using fraudulent flags and may follow others in joining the Russian registry to continue their commercial activities,” Meade said.

More than 40 ships from the Ghost Fleet have been registered under the Russian flag since June, according to Lloyd’s List.

“The Ghost Fleet is very flexible,” Meade said. “Vessels that have been engaged in the Venezuelan trade will now likely turn to Iran or Russia. There is an immediate pipeline of vessels capable of switching between these trades.”

Data from Lloyd’s List shows that more than 12% of the world’s tanker fleet today operates in the shadow fleet.

“Dozens of Shadow Fleet tankers, many of them registered in entirely fraudulent ship registers, routinely pass under NATO’s noses as they enter and exit the Baltic Sea,” Meade said.

“Just like we saw in the Red Sea, where trade routes are disrupted, reshuffling ships takes time,” Meade said. “At some point we will see how the Shadow Fleet is reshuffled as a result of this latest US intervention in Venezuela. We may see more of these ships moving towards Russian and Iranian trades.”

Meade said many tankers that reflag to Russia are empty at the time of their change, suggesting they are seeking protection from Russia before their next loading operation.

Ship tracking by energy consultancy Kpler shows changes in trade between Russia and Venezuela. Since the end of November, several naphtha shipments of Russian origin have diverted, wandered into Venezuelan waters or reversed course.

Ghost fleet tankers operate outside of established insurance arrangements.

“There is no evidence that many of these ships have insurance,” Meade said. “All of this has not been tested. If there is a large spill with one of these ships, which are very old, there is no way of knowing who will pay for the cleanup.”