Russia's oil exports to China via ‘dark’ ship-to-ship transfers have surged as trading secrecy grows

The amount of Russian oil involved in "dark" ship-to-ship transfers has risen sharply over the last few months as Western sanctions lead to higher levels of secrecy in global crude markets.

The volume of Russian crude moved via such transfers increased from 44,000 barrels a day in June to 182,000 barrels a day in the first 18 days of July. According to the commodities data company, most of the oil has been going to China.

A ship-to-ship transfer involves one vessel unloading its cargo into another. At least one vessel has turned off the tracking signal that lets authorities see where it is when it's dark.

According to analysts at Vortexa, ships have been leaving Russia loaded with oil and heading for the Atlantic.

Following Russia's invasion of Ukraine in February, the global oil markets have become more secretive.

Western sanctions on Russia have made companies hesitant to do business with the country. The US and UK have banned imports of Russian oil, while the European Union plans to phase it out.

Russia has stopped exporting crude oil to Europe because of sanctions. Russia's oil is being snapped up by India and China at a discount.

As of Monday, there were four very large crude carriers that had picked up their cargo from another ship in the Atlantic.

According to Lloyd's List, five Chinese vessels have been at the center of the recent ship-to-ship transfers of Russian crude in the Atlantic. Dark transfers are taking place as a result of a jump in exports to Asia compared with prewar levels.

David Wech said that China's reasons for taking Russian crude via dark ship-to-ship transfers are difficult to comprehend.

He told Insider that India took as much crude as they wanted. India and China are still buying Russian crude despite the sanctions.

If harsher sanctions are put in place, Chinese and Russian companies may be practicing.

He suggested that Chinese companies may want to keep their reputation clean. The US's top energy advisor urged India to limit its purchases of Russian oil in order to not hurt its international standing.

The big state companies in China are not involved in the dark transfers.

Russian oil is being transported by tanker that used to carry Iranian crude, according to Vortexa. Russia, Iran and Venezuela are competing to sell their oil to India and China because of US sanctions, according to a report.