Sovcomflot, Russia's largest tanker company, suffered a $393 million net loss in the first three months of the year. The group blamed the decline on the new Western sanctions, which have caused operational issues, reduced revenues, and the idleness of some sanctioned ships.

In 2024, the United States and European Union imposed sanctions against Sovcomflot's fleet to reduce Russia’s oil revenue that it could use to fund its war in Ukraine.

In January, United States added more Sovcomflot ships to its list of assets that are sanctioned and revoked a U.S. license granted last year which allowed some vessels within the fleet to continue to operate in spite of sanctions.

Sovcomflot reported a drop of 49% in revenue for the first quarter compared to last year, down to $278.5 millions. The January sanctions were said by Sovcomflot as having been especially impactful and creating further commercial and operational problems.

Sovcomflot released a statement saying that the intensification of Western Sanctions has made it harder to operate the fleet, and resulted in lower revenues and downtime on some sanctioned ships.

"In the period covered by the report, the company and its ships were subjected to unprecedented sanctions, which caused additional operational and commercial difficulties for the operation of the fleet", Sovcomflot stated.

EBITDA (earnings before interest, taxes, depreciation, and amortization) for the group fell by almost 69% to $105 millions. Sovcomflot believes the sanctions are illegal. (Reporting and editing by David Evans, Tomaszjanowski and David Evans; reporting by Gleb Stallyarov and Alexander Marrow)

(source: Reuters)