Sovcomflot asks for preferences amid tough competition with foreign carriers amid falling oil prices

Sovcomflot faces tough competition from foreign carriers after the price of Russian Urals crude fell below the $60-a-barrel ceiling set by Western sanctions. Now the company is asking the state for preferences.

As the head of Sovcomflot Igor Tonkovidov reported in an interview with Interfax, when the price of Russian oil falls below the price cap, competition in the transportation market increases, since Western transportation companies can now completely legally transport Russian oil.

"What did we see in the first quarter? Many foreign shipowners from unfriendly countries, who were not engaged in the transportation of Russian oil and oil products in 2024, returned to the market. This intensifies competition and complicates our work," he noted.

“Since the fleet of foreign companies is not affected by sanctions, they are deliberately creating unfair competition for the fleet controlled by Russia,” complained I. Tonkovidov.

According to him, even now, under sanctions, the Russian fleet transports less than 10% of export cargo. At the same time, Russian companies spend more than $20 billion annually to pay for the services of foreign sea carriers. Sovcomflot's share in the export transportation of Russian oil and oil products is approximately 15%. This share will not increase for now.

According to I. Tonkovidov, the problem of competition with foreign carriers can be solved by providing ships under the Russian flag with priority access to the Russian cargo base.

"The industry is currently in a difficult situation, and it simply needs legislative support. We are an export-oriented country, and it is extremely dangerous to fall into such deep dependence on foreign ship owners, who can turn around and leave at any moment. Therefore, certain support measures are needed, a transport and logistics policy is needed," he said.