“Should the U.S. government issue a weak response for the violation by Vitol, it could send a message to other oil companies that violating sanctions for the sake of profit is worth the risk,” Ariel Cohen, PhD, Senior fellow, the Atlantic Council and founding principal, International market analysis LTD, said.
“Typically, ships are vetted before loading begins – checking for maintenance issues and more importantly compliance verifications of international laws and regulations. This implies that Vitol may have willfully and knowingly leased the US-sanctioned vessels. The alternative – that they were not aware of the sanction status – is difficult to conceive. Vitol’s multibillion dollar business dealings with U.S.-based energy companies (supplies, storage, transport, etc.) may now be subject to legal action,” the expert said.
According to the expert, Vitol has encountered similar controversy in the past.
“In 2012 it bought Iranian oil through a subsidiary despite U.S. and EU sanctions. Should the U.S. government issue a weak responsefor the violation by Vitol, it could send a message to other oil companies that violating sanctions for the sake of profit is worth the risk,” Cohen said.
He reminded that Vitol, one of the largest oil traders in the world, has used U.S. sanctioned vessels for multiple trips to transport Turkmen oil. Vitol signed a contract with ENOC (Emirates National Oil Company) for the export of crude oil from the oilfield developed by the ENOC subsidiary, Dragon Oil on the Turkmen shelf of the Caspian Sea.
According to Ariel Cohen, initially, this crude oil was being planned to be exported by vessels belonging to the Russian shipping company VF Tanker and the Turkmen Maritime Shipping Company. “However, apparently after some considerations, Vitol decided to reduce transportation costs by leasing the aging “Mekhanik Voronkov”, and “Grigoriy Bugrov” tankers. These vessels are owned by Trans-Flot JSC of Samara, Russia, a company sanctioned underthe Office of Foreign Assets Control (OFAC).”
As we reported earlier, VITOL, one of the largest oil trading companies in the world, has leased vessels which faced US sanctions due to sale of oil products to the Crimea and Syria.
According to the new information, Vitol has also leased “VF Tanker-3” (IMO 9640516, 2012), which is under US sanctions, along with the earlier indicated tankers “Mekhanik Voronkov” (IMO 886719, 1971) and “Grigoriy Bugrov” (IMO 8848628, 1974).
Owners of all these vessels, (VEB Leasing OJSC and JSC Trans-flot), are respectively in the sanctions list of the Office of Foreign Assets Control (OFAC) on EO13662 and EO-13685 programs.
According to the information as of February 10, Vitol transported Turkmen oil via the vessels that faced US sanctions.
On February 2, the oil of company Dragon Oil was loaded to VF Tanker-3, on February 6 to Mekhanik Voronkov tanker and on February 8, Eni’s oil was loaded to Grigoriy Bugrov tanker.
These facts show that Vitol has wilfully and repeatedly violated the sanctions. Moreover, Dragon Oil Turkmenistan LTD (a subsidiary of ENOC – Emirates National Oil Company) and Eni Turkmenistan LTD (a subsidiary of Italy’s Eni Spa) were also involved in violations.