Russian Arctic for Russian ships

Tankers operating in the Arctic might soon have to sail under Russian flag.

A new law might force shipping companies to sail in the Arctic only under Russian flag.


New legislation under elaboration by the Ministry of Transport proposes to significantly restrict shipping with petroleum products in Russian Arctic waters. If adopted, the law will prohibit companies to export Russian Arctic oil and gas with foreign-registered ships. The ministry also considers to ban Arctic oil shipping with vessels not built in Russia, a source close to the ministry tells newspaper Kommersant.

The bill can be seen as a response to western countries’ sanctions against the Russian Arctic oil industry, the newspaper reports. Those sanctions are hitting hard on Rosneft and Gazprom which both are dependent on western know-how and technology for complex Arctic field developments.

Rosneft has announced that it is postponing several planned well drilling operations. Similarly, it has got permission from federal authorities to extend field license terms in several Arctic projects with up to two years.

The law is however likely to create far more damage to Russian stakeholders than to foreign shipping companies.  Even Russia’s biggest shipping company Sovcomflot has most of its ships sailing under foreign flags. Also the company’s new LNG carriers are all planned to be registered abroad. And the Russian shipbuilding industry is not yet ready to take on the construction of the number of ships needed.

The new Zvezda yard outside Vladivostok, the country’s future shipbuilding hub, will be ready to take on construction of large-scale tankers only after 2018.