Greek-managed ships divert Russian oil to Africa in order to avoid Red Sea Attacks

Three oil traders and LSEG data indicate that several Greek-managed oil tankers are increasingly avoiding using the Red Sea to transport Russian oil to Asia, choosing instead the longer route through Africa due to the escalating threat of Houthi attacks.

Rerouting comes after a deadly drone attack and speedboat attack on a Greek-operated, Liberian flagged bulk carrier, off Yemen earlier this month, in which four seafarers were killed. In July, the Houthi group, which is backed by Iran and has a fleet of speedboats under its control in Yemen, sank a second vessel. This ended a short period of calm.

Since the Houthi began their attacks in November 2023, traffic on the Red Sea has plummeted. The group says the attacks are in solidarity with Palestinians during the Gaza conflict.

Russian oil shipments have continued to flow through the area despite the fact that most Western shipowners abandoned it last year. This is due to the close relationship between Moscow and Iran, who back the Houthis.

Recently, Greek shipping companies became active on the Russian Urals oil market. The price of the grade has dropped below the Western price limit of $60 per barrel. This allows them to provide insurance and transport services while still complying with the sanctions under the Group of Seven's price cap.

LSEG data indicates that vessels like the Minerva Elpida (carrying a total of 300,000 metric tonnes of Russian Urals crude) and Minerva Vera (carrying a total of 200,000 metric tons of Russian Urals oil), departed late June and early in July, and are now en-route to India via Cape of Good Hope.

The Greek ship managers did not respond to emails asking for their comments.

Was not able determine who made the decision to alter the route.

The tankers in question are part of a fleet whose sister vessels have been docked in Israeli ports since October 20, 2023. According to Norwegian marine insurer Gard, this could make them targets for Houthi force.

P&I insurance is a standard feature of ship protection. It covers claims from third parties, including those involving environmental damage or injury. Ships are covered by separate hull and machine policies against physical damage. War risk insurance is necessary when entering high-risk zones such as the Red Sea.

Kyklades Maritime manages the Nissos Ios a midsized Suezmax under Marshall Islands flag that can carry up to 1 million barrels. Gard provides protection and indemnity insurance. Minerva Elpida is a Greek flagged Aframax tanker capable of carrying up to 0.7 million barrels. The Minerva Vera is a Malta-flagged Suezmax. Both are managed by Minerva Marine, and insured by NorthStandard.

Gard declined to comment about Red Sea security and said that it had not provided war risk insurance for the Nissos Ios. It is not known which companies insured the war risks of these three vessels.

Northstandard stated that neither P&I nor war risk underwriters would provide shipowners with routing recommendations. Instead, "the decision to travel via the Cape would have been made jointly by both owners and charterers".

Typically, it takes two times as long to travel via the Cape of southern Africa to Europe than to travel through the Red Sea.

Since the Houthi attack, war risk premiums on Red Sea cruises have increased by more than two-thirds. This has resulted in an increase of hundreds of thousands of extra dollars for each seven-day voyage. (Reporting in MOSCOW by Jonathan Saul and Louise Heavens in LONDON)

(source: Reuters)