fbpx
Tuesday, September 29th, 2020
Home » Technology » COSCO Tankers Go Dark Amid U.S. Sanctions

COSCO Tankers Go Dark Amid U.S. Sanctions

October 9, 2019 by Reuters

By Shu Zhang and Roslan Khasawneh SINGAPORE, Oct 9 (Reuters) – About one-third of the oil tankers owned by COSCO Shipping Tanker (Dalian) have shut off their ship-tracking transponders since the United States imposed sanctions on the company for allegedly shipping Iranian crude, shipping data showed.

From Sept. 30 to Oct. 7, a total of 14 COSCO Dalian ships, six of which carry some oil, stopped sending location data from their automatic identification system (AIS), ship tracking data on Refinitiv Eikon showed. The U.S. imposed the sanctions on Sept. 25.

The International Maritime Organization (IMO) requires that AIS transceivers be fitted to commercial and passenger vessels for safety and transparency purposes. The devices can be turned off manually by a ship’s crew for legitimate reasons such as avoiding detection in piracy or high-risk zones.

However, the transponders are often shut off to conceal a ship’s location when illicit activities occur.

“It is becoming a cat-and-mouse game, with the U.S. ratcheting up the sanctions while the Iranians (and their Chinese or other buyers) find novel ways to circumvent these” including frequent ownership changes, complex corporate structures and shutting off the AIS transponders, said Bruno Vickers, the senior director for Asia at political risk group GPW in Singapore.

(AIS) transponders are often shut off to conceal a ship’s location when illicit activities occur.

“Turning off transponders is a tried and tested tactic that the Iranians have used before, creating a fleet of ghost ships that cannot be tracked. It’s not ideal for ship safety and undoubtedly there will be increased U.S. surveillance of suspect cargoes,” he said.

COSCO Dalian and its subsidiaries own 43 oil tankers, including 26 very large crude carriers (VLCCs), according to two disclosure documents issued by COSCO Dalian’s parent company, COSCO Shipping Energy Transportation Co, on Oct. 1.

A COSCO Shipping Energy official that handles media inquiries declined to comment when contacted by telephone.

Nine of the 14 ships offline are VLCCs, according to the ship-tracking data. The six ships carrying some oil have been identified based on the ship-tracking data showing their draught, or how deep the vessels sits in the water.

An additional six COSCO Dalian ships are idled, the ship-tracking data showed. Three of the ships, including a VLCC, are floating off China, with two ships off Brazil and one near Qatar.

The ship-tracking data shows the destinations for the remaining COSCO Dalian ships as mostly ports in China and Asia. Charterers are avoiding the vessels for fear of invoking the sanctions.

The 26 COSCO Dalian VLCCs represent 3.3% of the global VLCC fleet of 792 ships recorded by the global shipping association the Baltic and International Maritime Council.

A Treasury Department official said on Tuesday the department does not comment on investigations, including to confirm whether one exists.

The official deferred further questions on the COSCO ships turning off their AIS transponders to the State Department which did not immediately return a request for comment.

Global tanker rates have soared after traders rushed to book alternative vessels to replace ships related to COSCO.

Freight rates for VLCCs to load Middle East crude for China have more than doubled to 131 Worldscale points (W), or $3.33 a barrel, from W64 on Sept. 25, according to Refinitv data.

COSCO Shipping Energy owns 137 oil tankers, five liquefied petroleum gas tankers and six liquefied natural gas carriers , according to a June filing.

(Reporting by Shu Zhang and Roslan Khasawneh; additional reporting by Florence Tan and Aizhu Chen in Singapore; Ron Bousso in London and Timothy Gardner in Washington; Editing by Florence Tan and Christian Schmollinger)

(c) Copyright Thomson Reuters 2019.

Other articles you may be interested in

Copyright © 2019 PortandTerminal.com. All rights reserved. This material may not be published, broadcast, written or redistributed.

Check Also

Container stacks. Bridge. Truck

U.S. companies on an inventory buying binge

Goods trade deficit rises; inventories increase REUTERS, SEPTEMBER 29, 2020 WASHINGTON (Reuters) – The United …

Map

Trump-backed Canadian railway to Alaska could free landlocked oil

REUTERS, SEPTEMBER 28, 2020 WASHINGTON/WINNIPEG, Manitoba (Reuters) – A private-sector proposal endorsed by U.S. President …