Russian oil ship-to-ship operations fall in May as Greece extends naval advisory

MOSCOW/ATHENS, May 23 (Reuters) - Russian oil and products ship-to-ship (STS) operations near Greece’s Kalamata declined sharply in May following a Greek naval advisory banning ship traffic off the coast of the southeastern Peloponnese, LSEG and traders' data showed.

STS operations have become more common since Group of Seven and European Union measures to restrict the sale of Russian crude and oil products, which led to nearly all Russian crude being shipped to Asia, requiring a switch to larger tankers for longer journeys.

International waters off the Laconian Gulf have become one of the most popular locations for Russian oil and products STS operations in Europe due to their proximity both to Russian ports and the Suez canal, which offers access to Asian markets.

Greece, in a rare move, has issued a series of Navtex notices, or navigational warnings, flagging military exercises in the Laconian Gulf area in May, urging vessels to avoid the area. Most recently, Greece extended an advisory up to June 24.

"There is a possibility that the Navtex will be extended for a longer period of time beyond June 24," a Greek defence ministry official told Reuters.

The official added that STS transfers in the open sea, beyond the region of Laconian Gulf, are not easy to conduct, and that may be a reason behind the decline in STS activity.

Tankers carrying Russian oil have already had to leave Spain’s Ceuta, formerly a popular STS site, as Spanish authorities tightened rules around ship-to-ship transfers in response to both sanctions and potential ecological risks.

Urals oil STS operations have moved south to Egypt's Damietta and Port Said ports, where Russian oil suppliers reload Aframax oil cargoes to bigger VLCCs (very large crude carriers), traders said. However, the change to a more southerly location incurs additional costs.

Russian oil products STS operations also moved from waters off the southeastern Peloponnese early in April mostly to Malta, where last month more than 320,000 tons of gasoline and naphtha was transferred for onward shipment, according to LSEG data.

At least another 300,000 tons of oil products loaded in Russian ports in May are heading to Malta for discharge, shipping data shows.

Four tankers loaded with Russian high-sulphur diesel and vacuum gasoil also offloaded to other tankers at the Port Said Anchorage, from where cargoes are moving to Fujairah and Asian countries, sources added.

No more Russian Urals oil supplies to the Laconian Gulf - which since the start of the year have stood at 200,000-400,000 metric tons monthly - are planned in May after the latest Urals cargo early in the month, which according to LSEG data was 280,000 metric tons being shipped to India by the tanker Mur. (Reporting by Reuters in Moscow and Lefteris Papadimas in Athens. Editing by Jan Harvey)