According to officially available data, India is in the process of providing safety certification for Russian shipping group Sovcomflot, through a Dubai-based subsidiary which manages many ships of the parent company. This move enables exports of Russian oil to India and other nations, after Western certification authorities withdrew their services following global sanctions imposed on Moscow.
The Indian Register of Shipping (IRClass) is one of the world’s leading certification agencies, and filled a crucial gap, after insurance coverage, in the documentation chain vital to enable the fleet of Sovcomflot to continue delivering Russian crude to international markets.
Official data provided on the IRClass website revealed that the agency had certified more than 80 ships that are being managed by SCF Management Services Dubai, which has been listed as a subsidiary of Sovcomflot, according to the company website.
An Indian source familiar with the process mentioned that most of the fleet owned by Sovcomflot had migrated to IRClass certification through the Dubai-listed entity.
Agencies such as IRClass are responsible for certifying the safety and seawothiness of ships, which is a vital part of the process required for gaining access to ports and securing insurance cover for the ships.
Russia’s crude oil sector had been badly hit by sanctions imposed on Moscos after its invasion of Ukraine. This had forced the industry to scout for buyers outside the West, and rely on Russian transporters and insurers to cover exports of crude.
Given the longstanding security ties between the two countries, India is one of the few nations to withhold condemnation of Russia, and has been responsible for drastically boosting purchases of Russian crude oil recently.
Strict sanctions imposed by the West on Russia had forced many oil importers to avoid trading with Moscow, and this led to a steep discount of Russian crude against other grades.
Indian refineries, which rarely used to purchase Russian crude due to high freight costs, utilised the opportunity to buy low-priced crude from Russia. Russian grade oil added up to 16.5 percent of India’s imports in May this year, in stark contrast to 1 percent for the whole of 2021.
Indian agency is a top-tier certifier
The Indian ship certifier, IRClass, is one of only 11 members of IACS (International Association of Classification Societies), which comprises top-tier certifiers for over 90 percent of global cargo tonnage.
Until March, the Russian Maritime Register of Shipping was part of the organisation, following which its membership was revoked due to the Ukraine invasion. Membership in IACS is crucial in attracting insurers, ports, registries and shipowners seeking safety certification.
Due to the sanctions imposed on Russia, four of the leading IACS members – UK, France, Norway and the US – have discontinued services to Russian companies.
Since the Russian invasion of Ukraine, Sovcomflot has been restricted and sanctioned by the UK and other EU countries, while the US has restricted financial activities of the firm.
A spokesman for IACS commented that IRClass certifications were not open for discussion on the agency. He further added that IACS refrains from getting involved in operational and commercial activities of its members, including surveying and testing of vessels and related equipment, and the issuance of statutory and classification certificates wherever authorised.
Sources with knowledge of the matter stated earlier this month that state-controlled Russian National Reinsurance Company had become the main reinsurer of Russian ships, including Sovcomflot’s fleet.