Lebanon loses millions of dollars in sanctioned Russian fuel scheme, The National uncovers

BEIRUT — Lebanon has been drained of tens of millions of dollars through Russian fuel imports under Western sanctions, in a suspected scheme that involved falsifying shipping papers to hide the cargo’s origins, the Abu Dhabi-based newspaper The National revealed in an investigation published on Monday.

International traders have been charging Lebanon up to 70 percent extra for its Russian fuel imports, far above the limit value set by the Group of Seven (G7)’s sanctions on Russia, according to the report.

The G7 slapped sanctions on Moscow following its war on Ukraine. In 2023, a price cap of $45 per barrel was imposed on Russian oil — well below its current market rate of $62.2 — in a bid to stifle Russia’s economy and energy revenues.

The Lebanese government had confirmed in July that there is no ban on oil imports from Russia, provided that Russian oil ‘price cap’ mechanisms are respected.

Masked origins and millions wasted

Complaints filed on June 12 by Lebanese engineer Fawzi Mechleb, who had inspected the Minerva Antonia vessel, prompted an investigation into dozens of tankers that had docked in Lebanon but were traced back to Russia, The National explained.

Mechleb alleged that foreign traders tampered with cargo manifests (the official records of a ship’s cargo) to pass off sanctioned Russian fuel as originating from Mediterranean countries (such as Turkey and Egypt), enabling them to overcharge Lebanon while violating both international and domestic regulations, the daily added.

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Data shared by oil experts show that 60 percent of Russian fuel shipments to Lebanon carried out ship-to-ship (STS) transfers during their journeys — a practice that, while not illegal, is widely regarded as a red flag for sanction evasion and smuggling, as it obscures both the origin and the volume of cargo, The National further detailed.

The National identified three vessels involved in suspect operations, including the Minerva Antonia, supplied by Iplom International SA, which departed Russia on July 25 with 33,841 tons of fuel toward Lebanon. Unlike other cases, this particular shipment did, however, not attempt to conceal its Russian origins.

“This could have been a great bargain for Lebanon,” The Nation said, because “the shipment should have been sold at about $10 million. But Lebanon allegedly never saw the discount and paid around $17 million for the shipment, documents show, around 70 per cent above its value.” 

 The Hawk III

Among the vessels under suspicion is also the Hawk III, believed to have carried Russian oil disguised as Turkish in order to pad prices.

The vessel, which was carrying fuel oil destined for Electricite du Liban (EDL), was prevented from illegally leaving Lebanese waters by the Military Naval Patrol on the orders of judicial authorities on the night Sept. 12. The operation saw three soldiers injured and 22 people on board of the ship arrested.

Commenting on the operation in a statement issued on Tuesday, the General Directorate of Custom explained that, acting on information received on Aug. 21 about falsified cargo documents, a military naval patrol was dispatched to board the Hawk III. 

Inspectors examined “the vessel’s papers and the captain’s computer, confirming that the fuel oil originated in Russia and that the documents presented to Lebanese authorities were false.”

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The public prosecutor was notified and imposed a travel ban on the vessel. To avert a nationwide electricity blackout, however, the Energy Ministry authorized the unloading of the cargo on Sept. 5, the statement noted. 

The fuel was discharged in stages at the Zouk terminal, with the remainder held at the Jiyeh terminal.

The ship was scheduled to return to Beirut for further investigation and pending seizure by the Lebanese authorities, the Customs Directorate added. But on its way back to the capital, on Sept. 12, the crew switched off the ship’s tracking device. It was then that the attempt to leave Lebanese water took place, followed by the Navy’s interception.

With multiple investigations still under way, it remains unclear whether Lebanese authorities knowingly accepted overpriced shipments or failed to carry out the necessary due diligence, The National noted.