In a downtown office block in Mumbai, packing tape peels off a black door, the handle of which appears to have been ripped off. A pile of chowki is scattered on the floor outside. A man in a neighboring office says the staff moved out a few weeks ago, destination unknown.
Some 1,200 miles away in Dubai, a small office in a shanty industrial area, gives no clue that it, too, is a small cog in Russia’s vast new petroleum supply chain.
The two locations are listed in an international maritime database as belonging to firms running $2 billion in tanker assets between them. In less than a year, he assembled a fleet that is now transporting millions of barrels of Russian oil around the world.
The first address is of a firm named Gatic Ship Management in Mumbai. The second fractal is for shipping. They are part of a vast network of maritime operations that came to prominence soon after the invasion of Ukraine, helping Russia’s oil exports to continue largely despite sanctions from the West.
“It is this new breed of tanker market players that has helped Russian oil continue to dominate the world,” said Rebecca Galanopoulos Jones, senior content analyst at VesselsValue, a firm that tracks the prices of thousands of merchant vessels. “It appears that sanctions on Russian oil have had little impact on overall export levels.”
Europe banned almost all marine oil imports from Russia from December 5 as well as joining the Group of Seven industrialized nations in imposing price caps on the country’s crude sales. This extended to refined fuel on 5 February.
Anyone wishing to access major Western services – especially insurance – must certify that the cargo they are transporting costs $60 a barrel or less. The limit was set high on purpose – the US already wanted exemptions to keep Russian crude flowing – and both upstart shippers are using plentiful Western insurance.
About three-quarters of Gatic’s fleet is covered reciprocally within the International Group of Protection and Indemnity Club in London, data compiled by Bloomberg show. For fractals, the ratio is higher still.
Both firms have several ships in their fleets covered by the American Club, one of the International Group’s 13 member organizations, which has its head office in New York, according to industry data compiled by Bloomberg.
The American Club’s chief operating officer, Daniel Tadros, confirmed that his organization includes vessels in the fleets of both firms, both of which have provided so-called verifications – documentary statements confirming that oil purchases are in accordance with G7 price caps. .
The need for firms such as Gatic and Fractal grew as many traditional Western shipping firms stopped lifting Russian barrels, either to protest an invasion or because of the threat of violating sanctions.
Even before the measure was introduced, a large number of tankers began to be sold to a new group of buyers whose identities and affiliations were often unclear.
permitted trade
A search for the company Gatic Ship Management on the website of India’s Ministry of Corporate Affairs did not yield any results. The Gatic website address suggests that it is under construction. The firm declined to answer questions about its activities.
There is only one email address for recruitment on Fractal’s website. Emails, a WhatsApp message, and a call requesting comment — to addresses and phone numbers provided by people in the know to Fractal executives — were not returned.
Its Dubai address is listed on Equasys as the location of the commercial manager for most of Fractal’s tankers. According to one manager, the firm recently moved out of a shared work space in Geneva – the home of its main office.
Gatic’s fleet can carry about 30 million barrels of oil and fuel, according to data compiled by Bloomberg. Fractal has a transport capacity of close to 15 million barrels.
Nearly all of Fractal and Gatic’s tankers called Russian ports this year, or carried Russian cargo by ship-to-ship transfers, according to tanker tracking data compiled by Bloomberg.
India and the UAE have not signed a price cap, nor do they have other restrictions on Russian oil. They can also legally use Western services, provided they certify cargo purchased at or below the cap.
Russia-serving
According to VesselsValue, a firm that tracks merchant vessel sales and purchases, Gatic’s earliest recorded tanker acquisition was in June 2022, with the most recent in February this year. Equasys Data Show, Fractal was in the same month.
One such example is the Galactic tanker Jumbo, which was seen calling at the port of Ust-Luga in Russia’s Baltic Sea on 11 February. The country’s oil, according to ship-tracking by Bloomberg. According to Equisys, the ship came under the management of Gatic on 3 February.
Russia exported about 3.2 million barrels of crude from its ports in the two months after the cap and Europe’s import ban were imposed on December 5, little changed from the previous two months. Both companies are part of the new supply chain network that allows this to happen.
Neither Gatic nor Fractal are listed as beneficial owners of the tankers in their fleet, meaning they are likely operating the vessels for others, whose identities are often not made public. He is described on the American Club’s website as the “registered owner” of his ships.
It is a common form of vessel ownership in the shipping industry, but does not reflect the true owner of the vessel.
Beneficial ownership is a more important detail in understanding who really owns property and assets, according to information from IHS, which maintains a shipping database for the International Maritime Organization.
“We’re seeing how easy it is to transfer ownership with these larger, newer groups,” said Steve Sikala, co-director of the Project on Economic Analysis of Regulation at the National Bureau of Economic Research.
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