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Sovcomflot, Russia’s leading tanker group, admitted that Western sanctions and shifting market conditions could slash their revenue this year. This is a rare public acknowledgment from a major Russian company of the impact these sanctions are having.
In February, the U.S. specifically targeted Sovcomflot, previously a global leader in tanker operations, with sanctions. This move aims to restrict Russia’s income from oil sales, a key source of funding for its military actions in Ukraine.
“The relentless pressure from sanctions makes it incredibly difficult for our company to function normally,” Sovcomflot CEO Igor Tonkovidov stated at the St. Petersburg economic forum, according to Interfax news agency. “Market changes have also added to the problem, affecting competition and freight rates.”
Tonkovidov further emphasized the ongoing challenges caused by sanctions in an interview with Reuters. “Sanctions create problems across the board. They definitely make our operations much harder.”
While Sovcomflot’s revenue in 2023 reached $2.3 billion, a significant 22.6% increase from 2022, Tonkovidov did not provide any estimates for potential revenue decline this year. In April, he reported that sanctions were already impacting about 8% of the tankers involved in transporting Russian oil.