Sovcomflot Reports Impact of Sanctions on Financial Performance

(Reuters) – Russia's leading tanker group Sovcomflot stated on Friday that Western sanctions on Russian oil tankers have limited its financial performance, resulting in falling revenues and core earnings.

The United States imposed sanctions on Sovcomflot in February as part of efforts to reduce Russian oil revenues that finance the war in Ukraine.

Sovcomflot reported a 22.2% year-on-year drop in nine-month revenue to $1.22 billion and mentioned that its earnings before interest, tax, depreciation, and amortisation fell 31.5% to $861 million.

Sovcomflot indicated, "The introduction of new sanctions was a limiting factor during the reporting period."

The Group of Seven nations and their allies imposed a Russian oil price cap of $60 a barrel, but enforcing it has proven difficult. As a result, tankers, including Sovcomflot ships, have faced significant sanctions.

CEO Igor Tonkovidov mentioned in June that sanctions and shifting market conditions may impact the group’s revenues this year. In April, he noted that sanctions were affecting 8% of tankers shipping Russian oil.

Over 60% of Russia's seaborne oil exports are directed to India.

Sovcomflot stated, "The company is continuing systematic work to overcome the emerging challenges."