Russia's shipping in crisis: Sovcomflot reports billions in damage!

Russia's shipping in crisis: Sovcomflot reports billions in damage!

In recent months, pressure on the Russian economy has increased, particularly as a result of strict Western sanctions. This leaves a major player in the maritime industry, the shipping company Sovcomflot, in trouble. This development is critically examined by merkur.de and paints a bleak picture of the current situation in Russia's shipping industry.

Sovcomflot, Russia's largest shipping company and a major player in tank transport, suffered a net loss of $435 million in the first half of 2025. For comparison: In the previous year, the company was able to record a profit of $324 million. Sales fell 39 percent to $618 million, while revenue from ship operations fell by half to just $306 million. These dramatic declines are a direct result of Western sanctions, which have put the company in a threatening situation, as fr.de confirms.

The Shadow Fleet and its pitfalls

To evade sanctions, Russia has built a shadow fleet consisting of aging tankers that fly false flags and manipulate GPS positioning. This fleet uses sophisticated methods such as ship-to-ship transfers and fake positioning data to keep its activities secret. Analysts estimate that the asset write-down due to the sanctions is around 29.8 billion rubles (317.1 million euros). Despite these efforts, the situation remains tense as EU and UK sanctions deny Sovcomflot's vessels access to their ports, as also mentioned in the merkur.de report becomes.

However, the impacts are not just limited to shipping. Things are also ablaze in the Russian shipyard industry: a large shipyard has announced that it will cut 70 percent of its workforce. The entire coal and oil population is suffering huge declines, while job losses extend beyond shipping and raise more fundamental questions about the stability of Russia's economy.

The challenges of the Russian economy

The sanctions have hit the Russian economy hard. According to deutschlandfunk.de, the EU has decided on a new package of measures to increase the pressure on the government in Moscow. Exports of oil and coal have fallen sharply, although Russia continues to maintain supplies to countries such as China and India. However, this often happens through detours and unconventional channels that not only endanger the integrity of international trading systems, but also strain relations with other countries.

With current economic growth of only 1.35 percent, the challenges of the Russian war economy are particularly clear. There are shortages of electronics and software while companies struggle to find workers. Inflation was 9.9 percent in January 2025, a sign that the everyday cost of living for citizens in Russia is rising while government spending on social services is falling.

In summary, it can be said that the sanctions are putting a significant strain on Russia's economy, which is particularly evident, for example, in the maritime sector, where the largest shipping companies are struggling with enormous losses. The question of how long this pressure scenario can be maintained remains open and will largely depend on political decisions in the coming months.