TLDR: Iran’s Billions in Oil Exports Worrisome trends were revealed in the U.S. Energy Information Agency’s (EIA) first report about Iran’s petroleum exports, as required by the Stop Harboring Iranian Petroleum (SHIP) Act. According to the non-partisan Foundation for Defense of Democracies (FDD): “The report found that between 2021 and 2023, Tehran sold $144 billion...
Supply chain and logistics disruptions have emerged as a critical challenge for global commerce, reflecting the intricate interdependencies of modern trade networks. Factors such as geopolitical events, extreme weather, labor disputes, etc., can cause unprecedented fluctuations in trade routes, delays in shipping timelines, and escalated costs across industries. The ripple effects are felt worldwide, with...
A Russian LNG Trade Lane, IUUF via Malacca, & G7’s New Guidance
What’s inside?
Why did the largest number of ships in four years pass through the Bering Strait last week? The answer, detailed in this week’s edition of the Global Trade Roundup, is connected to Russian liquified natural gas (LNG) trade.
We also analyze the 440% increase(!) in fishing vessels flagged with illegal, unreported, and unregulated (IUU) fishing risk crossing the Malacca Strait last week. And we take a look at the G7’s first joint guidance for industry on “Preventing Russian Export Control and Sanctions Evasion.”
The Arctic Lane for Russian LNG Trade
Russia’s Gazprom is accelerating its liquefied natural gas (LNG) exports to China, according to public media sources, aiming to hit maximum capacity by the end of 2024. China is viewed by Russia as a replacement for the European market, which has been affected by the Ukraine-Russia war and the latest sanctions on Russian gas announced by the European Union.
Windward’s Early Detection model shows that there was a sharp 200% increase in the number of vessels that passed through the Bering Strait, located between Russia and Alaska, in the previous week. The increase during the past week was the highest in the past four years, which is a significant anomaly.
All vessels that passed through the Bering Strait last week were classified as exhibiting risk related to Russia, based on insight from the Windward Maritime AI™ platform. Seventy-eight percent (78%) were classified as moderate risk, 11% as high risk, and 11% as sanctioned, which may suggest that these vessels transport Russian gas in the area.
The data also shows that all of the vessels display the same sailing pattern through the Arctic Sea – they sail from the port of Sabetta (LNG 1 project) to ports in China, mostly the ports of Nantong, Nansha, and Shenzhen. Some of the vessels even sailed back to Russia, after arriving in China.
There’s more…Windward’s AI-powered platform found that vessels that are related to the sanctioned LNG 2 project in Utrenniy are also passing through the Bering Strait.
Last week, a previously sanctioned vessel, the Everest Energy (IMO: 9243148), passed through the Bering Strait for the first time, but did not continue sailing to China. The vessel remained in the Russian EEZ and sailed towards the Sea of Okhotsk, located in the Eastern part of Russia. It lost its signal on September 20 in a bay located near the port of Petropavlovsk Kamchatskiy. There were no gas facilities or ports at the location it lost its signal, but optical satellite imagery shows a suspicious ship-to-ship (STS) meeting. On September 22, the vessel met with the Koryak FSU (IMO: 9915105), a sanctioned, Russian-flagged floating storage vessel that has been docked for a year at that same location. It is possible that the Koryak FSU is being used as a docking station to sell gas in the area via STS engagements.
Windward’s insights show the flow of Russian gas from Russia and the pattern of vessels transshipping Russian gas in two possible ways:
LNG tankers conducting port calls in Sabetta that then pass through the Bering Sea and conduct a port call in China (Nantong, Nansha, and Shenzhen, mostly).
LNG tankers conducting port calls in Utrenniy that then pass through the Bering Sea, “losing” their signal in Russia near Kamchatka
Due to the evolving geopolitical situation caused by the war and accompanying sanctions, Russia is trying to find new markets and methods to sell its gas. Using Windward’s capabilities can show the flow of Russian gas and help your organization avoid future sanctions in the future.
Increase in IUU Vessels’ Movement through the Malacca Strait
Windward’s Early Detection model found a 440% increase(!) in fishing vessels flagged with illegal, unreported, and unregulated (IUU) fishing risk crossing the Malacca Strait last week. This was the highest number of IUU-flagged fishing vessels crossing the strait in the past four years. Similar to the number of vessels that crossed the Bering Strait, this was a significant anomaly.
The majority of the vessels that crossed the Malacca Strait were found by the Windward Maritime AI™ platform to be Chinese-flagged (90%). Most vessels (94%) departed ports in China prior to their arrival to the Malacca Strait. Open sources have suggested that Asian IUU fleets operate in the Arabian Sea in growing numbers to meet fishing product demand in East Asia.
Based on Windward’s data, 24% of the vessels that crossed the Malacca Strait are sanctioned, mostly by OFAC, for forced labor activities, and/or vessels’ owners that were charged over forced labor. Windward’s MAI Expert™, the industry’s first Gen AI agent, offers explainability for one of the vessels:
It appears that the vessels that crossed the Malacca Strait are sailing together via the Indian Ocean. Based on historical data, it appears that there has been an increase in IUU activity in the Arabian Sea between the months of October and December during the past three years. This suggests that the vessels are headed towards the Arabian Sea to commence operation once the fishing season in the area resumes.
Area visits in the Arabian Sea by IUU-flagged fishing vessels, January 2020-September 2024.
While the trend of IUU fishing vessels operating in the Arabian Sea appears to be seasonal, the historical and recent data produced by the Early Detection model suggests an increase in the volume of IUU-flagged fishing vessels operating there. This could lead to increased economic damage to marine life, as well as harm to local fisheries in the area, due to overfishing in the area via advanced fishing techniques and the growing numbers of vessels. Using Windward’s capabilities can help you better understand the increase in IUU activity around the world and how it has evolved over the years.
G7’s First Joint Guidance on Preventing Russian Export Control and Sanctions Evasion
The G7 issued their first joint guidance for industry on “Preventing Russian Export Control and Sanctions Evasion.” The guide provides an overview of measures taken by the G7 countries to restrict Russia’s access to critical technologies and materials, in response to its ongoing conflict in Ukraine. Key elements of the report include:
G7 enforcement: a reminder about the G7 Enforcement Coordination Mechanism (ECM) that was introduced in February 2023. The ECM’s aim is to improve compliance and enforcement of sanctions. The ECM established a sub-working group on Export Control Enforcement to facilitate information exchange and best practices.
Items of concern: a list called the Common High Priority List (CHPL) identifies 50 items, such as microelectronics and machine tools, that pose a high risk of being diverted to Russia due to their critical role in weapons production.
Red flag indicators: the report highlights red flags that may signal potential sanctions evasion. These include abnormal business activities, misclassified goods, inconsistent shipping routes, and suspicious customer behavior, such as links to sanctioned Russian entities, or a sudden spike in trade with third countries
The guide shows stakeholders that regulators and nations are united in this approach, and are putting a very strong focus on loopholes that enable circumvention around existing sanctions and regulations.
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