How ‘blood oil’ in Jamnagar, Mangalore refineries ends up in Australia

Australian leaders from all sides expressed anger at the invasion. The liberal government condemned Russian President Vladimir Putin for his actions. When Anthony Albanese became Prime Minister in May 2022, one of his first foreign visits was to Kiev, the capital of Ukraine.

Albanese promised military and humanitarian aid to help Ukraine defend its territory.

Australia supplied Bushmaster with armored vehicles, artillery and Abrams tanks.

Total aid was worth $1.5 billion over three years. Australia has imposed sanctions on Russia’s two largest oil exporters, Lukoil and Rosneft, in 2023.

The United States, the European Union and the United Kingdom have imposed sanctions on Russia and tried to reduce the price of Russian oil in the hope of limiting Moscow’s profits.

US President Joe Biden, in office from January 2021 to January 2025, has vowed to toughen sanctions and do more to halt oil trading.

This was not enough to stop profitable trading. Russia uses a “shadow fleet” of ships to evade sanctions, but Western governments have detected many of them and imposed sanctions on their owners.

How does Russia operate its ‘shadow fleet’ of ships?

Some Russian oil can be transferred between ships in international waters to conceal its origin.

The main destinations are India, China and Malaysia because these countries have not joined countries such as the US, UK, EU and Australia in banning Russian oil.

Refiners can make huge profits from this trade. They can buy crude oil from Russia at prices lower than the market average, use it to produce diesel and gasoline and sell them at market prices.

Russian oil, commonly known as Ural crude, is cheaper than standard market supplies such as Brent crude.

But international organizations track the ships and publicly available data reveals the voyages. This means independent analysts can see where Russia is exporting oil and who is using it to supply the Australian market.

We can see how much of this oil is converted into gasoline and diesel at our gas stations.

Our research was based on detailed data. CREIt shows the list of ships going from Russian ports to refineries in our region.

One of Russia’s largest supply ports is Novorossiysk on the Black Sea. Ships could take this oil to the Mediterranean and to India via the Suez Canal.

Another important port is St. Primorsk, near St. Petersburg. Ships carry this oil via the Baltic to the Atlantic Ocean to reach destinations including India.

The third important source is Nakhodka near Vladivostok in the Pacific Ocean. The ships mostly take this oil to Chinese refineries, but the CREA analysis also shows that some of the ships are heading to India.

The fourth supply port, Vanino, is located near the island of Sakhalin, also off Russia’s Pacific coast. According to CREA analysis, many ships from this port carried crude oil to Malaysia.

‘Laundry’ ports

The world’s largest refinery is an important fuel source for Australia. This refinery is located in Jamnagar, India, and is owned by Reliance Industries, a company led by India’s richest man Mukesh Ambani.

Jamnagar has a domestic refinery for the Indian market and an export refinery in the Special Economic Zone. CREA estimates that the refinery at Jamnagar SEZ will supply 90 per cent of all diesel and gasoline shipped from India to Australia since 2023.

Using publicly available lists of ships and their cargo, CREA estimates that 47 percent of crude oil destined for the Jamnagar refinery was supplied from Russia between January and October this year.

This means that 47 percent of the oil and diesel exported from Jamnagar to Australia belongs to Russia.

Reliance Industries announced last week that it would stop buying Russian oil from its Jamnagar export refinery and would no longer use Russian crude to produce gasoline and diesel that it sells to Australia.

Another refinery is in Mangalore in the southern Indian state of Karnataka. It is state-owned and supplies about 10 per cent of the petrol and diesel shipped to Australia from India, including oil from Russia.

Malaysia is another important fuel source for Australia. The main refinery is at Tanjung Bin in the state of Johor, near Singapore. It is operated by Vitol, a global oil company owned by wealthy traders.

According to Reuters, Vitol is the world’s largest oil trader and has made a net profit of US$45 billion over the past five years.

Vitol suspended most of its Russian trading when the EU imposed sanctions in 2022 and 2023, but S&P Global said this year the company continues to buy some oil as its “key fuel source.”

CREA data shows that ships deliver fuel to Vitol’s ATB refinery from Russian ports such as Novorossiysk on the Black Sea, Vanino on the Pacific coast and Ust-Luga on the Baltic Sea.

Proteus Bohemia – Ship to Sydney

Here is an example of how Russian oil reaches Australia. In recent weeks, scores of tankers have transported oil from Russian ports and reached the Indian facility in Jamnagar, home to the world’s largest refinery complex.

One of these was the tanker Savir Tiger, which flew the Indonesian flag and had the capacity to carry 62,863 tons of oil. It left Primorsk, Russia, on 29 September and reached Jamnagar on 31 October. We relied on CREA, which uses publicly available data to map this journey. We checked the ship’s identity using the International Maritime Organization code 9388730. gemifinder.com To learn more about the ship.

Another tanker was Barq, which flew the Omani flag and could carry 81,409 tons of oil. It left Novorossiysk, Russia, on 4 October and reached Jamnagar on 25 October. We checked this ship using IMO code 9321691.

The third tanker was Rymo, which flew the Sierra Leone flag and had a capacity of 58,418 tons. It left Nakhodka, Russia, on 10 October and reached Jamnagar on 4 November. The IMO code is 9308857.

Russian oil was clearly flowing into the Reliance Industries refinery.

We cannot track every drop of oil in a refinery, but we do know that the Jamnagar export refinery accepts Russian crude because its owner, Reliance Industries, has confirmed this fact. And we know that shortly afterwards the refinery loaded gasoline and diesel onto ships bound for Australia. (In a modern refinery, converting crude oil into diesel and gasoline can take up to a day.)

The tanker Proteus Bohemia, flying the Singapore flag, left Jamnagar on November 8 with 78,000 tonnes of oil. He gave the destination as Botany Bay, but the recipient of the cargo was not publicly disclosed. We relied on independent analyst Mark Corrigan to check out this ride.

Proteus Bohemia was built in 2022 for China Communications Bank Financial Leasing Corp. and leased to a division of Shell. However, we contacted Shell and they told us that the company is not responsible for this trip or the cargo. We cannot be sure of the destination but it was not organized by Shell. But we know about the cargo because Shell told us that this journey was chartered by Reliance Industries.

According to public data reported by Proteus Bohemia is expected to arrive at Botany Bay on November 30. gemifinder.com

After years of concern, signs of action are beginning to emerge. Reliance Industries’ Jamnagar refinery announcement is significant. Foreign Affairs Minister Penny Wong welcomed the change.

This won’t stop all the “blood oil” from coming to Australia because other refiners haven’t made the same promise. But it does show that there is a way to clean up the oil trade.

– Matthew Absalom-Wong with Zeinab Ghaemi and Tom Compagnoni

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