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50 de-flagged oil tankers eying South Asian markets for recycling

Oil Tanker

Fifty ships that were eyeing for recycling facilities in South Asian countries, earlier they have been stripped off their flags due to concerns about their safety and certification. These ships had been rejected by two prominent maritime classification organizations, the American Bureau of Shipping (ABS) and Lloyd’s Register.

An Indian agency has taken on the task of providing safety certifications for a significant portion of private Ship Management’s fleet. Ship Management company is a major carrier of Russian oil to India. The move comes after both Lloyd’s Register and ABS withdrew their classification for many of ship management company’s vessels. This Mumbai-based company, which has become a key player in Russian oil transport, also reflagged several of its ships to Mongolia, as reported by Lloyd’s List Intelligence.

Ship recycling hits a 15-year low: challenges and sustainability concerns

Earlier, 36 ships managed by ship management company were stripped off their flags by the St. Kitts & Nevis International Ship Registry. However, data from the Indian Register of Shipping (IRClass) showed that six ships were reflagged to Mongolia. Additionally, some other ship management company’s ships were recently reflagged to Gabon.

Classification societies like Lloyd’s Register, ABS, and IRClass play a crucial role in conducting seaworthiness checks and providing certification that is essential for obtaining insurance and accessing ports. While London-based Lloyd’s Register and other organizations like ABS and IRClass had been involved in these processes.

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Private Ship Management company stepped in with a fleet of more than 40 tankers as Western sanctions tightened around Moscow’s energy trade. This move positioned India as the largest buyer of seaborne Russian crude following Russia’s involvement in Ukraine. Despite these sanctions, ship management company managed to navigate these restrictions through changes in ship reflagging and registry.

However, the efforts of Western service providers to oversee the supply of Russian oil are becoming stricter, as evidenced by the withdrawal of certifications and flag stripping. Still, ship owners and operators can easily acquire new documentation to continue their operations, highlighting the limitations of such oversight.

South Asian countries dominates ship recycling industries

The American Bureau of Shipping (ABS) stated that it strictly adheres to U.S. sanctions policies and is working to transfer its certification from the ship management company’s vessels. They mentioned that 13 vessels are currently undergoing this transition.

Around 36 ships have received certification from the Indian Register of Shipping since mid-March. The data also reveals that many of these ships are managed by Indian firms. These companies are responsible for safety and environmental matters, while said ship management company handles commercial operations, according to shipping database Equasis.

The future of ship recycling

Lloyd’s Register announced its intention to withdraw certification from 22 of ship management company’s ships by June 3, 2023. Major U.S. ship insurer American Club and Russian insurer Ingosstrakh have both ceased providing coverage to said ships.

India’s ship certification authority is a member of the International Association of Classification Societies, a group that includes ABS and Lloyd’s Register. Together, these organizations account for over 90% of the world’s cargo-carrying tonnage.


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