Russian tanker group Sovcomflot expects more pressure from Western sanctions after profit slump

MOSCOW (Reuters) -Russia's leading tanker group Sovcomflot on Friday blamed Western sanctions for a profit slump in 2024 and warned that new restrictions imposed on its fleet this year would exert increased pressure.

The United States and the European Union imposed sanctions on Sovcomflot and its fleet in 2024 to try and reduce Russia's revenue from oil sales that it can use to finance its war in Ukraine.

State-controlled Sovcomflot said its net profit dropped by 55% to $424 million in 2024.

The group's earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 34% to $1.01 billion and revenue declined by 19.3% to $1.87 billion.

Western sanctions have targeted the so-called "shadow fleet" that Russia has used to avert a price cap imposed by the G7 countries in late 2022, which bans Western companies from providing insurance or shipping for Russian oil sold for more than $60 a barrel.

In January, the United States added new Sovcomflot vessels to the list of sanctioned assets and withdrew a U.S. licence, granted last year, that had allowed some vessels in its fleet to operate despite sanctions.

"New large-scale sanctions from the U.S. (Treasury), imposed after the reporting date, have became an additional restricting factor in the company's operations," Sovcomflot said.

The increased sanctions' pressure has led some vessels to sit idle, creating additional operational difficulties, Sovcomflot said.

As a result of sanctions, the company said it anticipates certain time charter agreements to yield lower payments.

(Reporting by Gleb Stolyarov;Editing by Alexander Marrow and Susan Fenton)