Sovcomflot Faces Major Financial Setback with $393 Million Q1 Loss Amid Intensified Sanctions on Russian Shipping

Russia’s leading shipping enterprise, Sovcomflot, reported a significant loss of $393 million in the first quarter of 2025, a stark contrast to the $216 million profit it achieved during the same timeframe the previous year.

The losses outpaced overall revenue, which plummeted by 48% to $278.5 million.

Sovcomflot attributed the sharp decline in revenue to «unprecedented sanctions,» which have severely restricted income and left portions of its fleet inactive.

In a statement, the company’s management mentioned they are implementing strategies to reduce operational and financial setbacks.

Despite the dismal performance, Sovcomflot emphasized that it still possesses adequate cash reserves and maintains a stable financial status.

Prior to the large-scale invasion of Ukraine, Sovcomflot operated the largest fleet of Aframax-class tankers globally and owned ten icebreakers.

As part of outgoing U.S. President Joe Biden’s comprehensive sanctions aimed at reducing Russian oil and gas revenues, a critical funding source for the Kremlin and its military efforts, Washington blacklisted 54 Sovcomflot tankers and four gas carriers in January.

In February, the European Union sanctioned SCF Arctica, Sovcomflot’s subsidiary, along with 74 other vessels linked to Russia.

In its announcement on Friday, Sovcomflot mentioned it is encountering challenges in processing payments and retaining customers.

«The restrictions have resulted in further business and logistical difficulties,» the company remarked, cautioning that there might be a decrease in payments for certain contracts.

«The company is undergoing a challenging adjustment period due to the new sanctions introduced in January. Some partners started to reduce shipments through Sovcomflot towards the end of last year,» noted BKC analyst Dmitry Bulgakov in March.

Sovcomflot is also dealing with legal challenges as it must change the registration of its vessels every six months. After sailing under the Liberian flag for over 20 years, the company has shifted its fleet registrations to Gabon, then Barbados, and most recently to Oman.

The Brookings Institution estimates that Russia operates a “shadow fleet” consisting of 343 vessels that evade sanctions.

Earlier this week, the EU and the UK enacted a new set of sanctions targeting hundreds of ships transporting goods from Russia.