Maritime Global Trade Roundup – March 1, 2024

Welcome to March! Here are the quick highlights and analysis you need from the week in maritime global trade, powered by Maritime AI™ insights.

Inevitable Ecological Damage from the Houthis

“An 18-mile oil slick” was the result of the Houthi attack on the Rubymar vessel, according to U.S. Central Command:

“The M/V Rubymar was transporting over 41,000 tons of fertilizer when it was attacked, which could spill into the Red Sea and worsen this environmental disaster. The Houthis continue to demonstrate disregard for the regional impact of their indiscriminate attacks, threatening the fishing industry, coastal communities, and imports of food supplies.”  

This outcome is bad enough on its own, but it also gets the imagination going: what happens if a Russian dark fleet tanker with no marine insurance gets hit? The U.S. announced 500 new sanctions this week, significantly increasing the chances of this happening. 

From Disruption to Regulation

The ongoing Red Sea crisis…shifting trade flows…the Russia-Ukraine conflict…and a cascade of constantly-evolving sanctions. Visibility into deceptive shipping practices and knowing who you’re doing business with is no longer nice-to-have, but rather non-negotiable, as regulators are clamping down. 

We organized a webinar featuring top industry experts to discuss where this is all going and offer AI-driven strategies for steering maritime compliance. 

Watch it now for actionable insights.

Russian Deceptive Shipping Practices Have Diversified…

At least two vessels transporting Russian crude oil were targeted in the Red Sea this month. The UK, U.S., and the EU are cracking down on traders and vessels trading above the price cap, with the entirety of Sovcomflot placed on the SDN list.

Windward’s new Sequence Search and AI capability for ship-to-ship classification have highlighted several trends:

• There was a 54% increase in ship-to-ship transfers of crude or oil products in the Mediterranean between April 202-February 2024, an increase that occurred immediately after the carrying vessel called a port in Russia.
• There was a 108% increase in ship meetings in Southeast Asia, also conducted after port calls in Russia.
• There was a 556%(!) rise in commodity ship-to-ship meetings between April 2023 and February 2024 in the Mediterranean, conducted after dark activity in Russia or the Black Sea. There was also a 127% increase in commodity STS meetings conducted after dark activity in Russia or the Black Sea.

The majority of these vessels are sailing under flags of convenience – less regulated and prone to risk. Windward’s Compliance Risk classified 22% of these vessels as medium risk, 13% as high risk, and 1% as sanctioned.

What does all of this mean for you?

1. Analyzing the sequence of events and holders’ history of the cargos in which you trade is critical
2. Take an even better look at cargos that transferred mid-ocean in the Mediterranean and Black Sea
3. Rank flags of convenience as higher risk
4. Employ AI to reduce false positives and avoid alerts due to noise in the system

Expansion of an Exciting Partnership

The growing whirlwind of sanctions and regulations continue to swirl – how can you keep doing business with confidence? 

While it’s been one of the most profitable years for trading, it’s also been one of the riskiest. We’re seeing: 

• Enforcement of oil price caps
• Implementation of new sanctions on Houthis and UAE companies
• Hundreds of blacklists
• Mandatory reporting for every tanker sold in the EU
• New attestation requirements for each STS transfer
• New regulations and requirements
• Unprecedented levels of volatility

Windward has expanded our partnership with London Stock Exchange Group (LSEG).

This partnership will see the integration of World-Check data into Windward’s shipping analytics, enhancing our capabilities by including over 1,000 global sanctions lists.

The data pool is significantly more structured and robust than any other set tested by Windward.

The large number of sanctions and watchlists means that users will be able to select specific lists easily and reliably. For example, a trader in Geneva will be able to choose the Swiss sanctions lists to ensure compliance with only relevant lists for his/her business.

World-Check highlights companies that are 50% (or more) owned by a sanctioned entity, which is required by regulations. This will be implemented as a new risk building block in Windward’s platform. 

Learn more. 

2 Vessels Sanctioned for Trading with Houthis – 3 Takeaways  

Two vessels were sanctioned for trading with the Houthis: 

The Artura, a 274-meter crude oil tanker sailing under the Panama flag, transferred cargo to another sanctioned vessel, the Mehle (IMO: 9191711). The Mehle was sanctioned for shipping Iranian commodities to China.

The Mehle is a 274-meter crude oil tanker also sailing under the Panama flag. 

Windward’s Maritime AI™ platform indicates both had dark ship-to-ship (STS) meetings and engaged in location (GNSS) manipulation. The Mehle was sanctioned on January 12 and began an ongoing GPS manipulation off Taiwan on January 13. The Artura commenced ongoing GPS manipulation off Singapore on February 21 and was sanctioned on February 27. 

Windward’s Sequence Search found that 47 VLCC tankers conducted the same activity pattern in the past year. 

When examining the same pattern for Hong Kong-based VLCC tankers, 13 vessels show the same pattern of activity, 8% classified as high risk, 15% are medium risk, and 15% are sanctioned. When examining vessels that are similar to Mehle, we see higher risk data, which might suggest this is a repeating pattern and that more sanctioning of vessels might be on the horizon. 

Note: location (GNSS) Manipulation was part of the recently released Quint-Seal compliance note and EU regulations – this is a clear expectation of all players in the maritime and trade world.

3 takeaways: 

1. Houthi trading networks are a new risk. From a sanctions perspective, this wasn’t a thing until recently
2. Location (GNSS) manipulation is clearly a strong risk indicator – connected to dark STS transfers
3. This is exactly the reason the Quint-Seal compliance note now requires enterprises to use satellite imagery for deeper investigations