US sanctions Russia-flagged bulk carrier over alleged Ukrainian grain smuggling to Yemen

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) disclosed on 2 April it had added 37,300-dwt, 2015-built Handysize bulk carrier Zafar (formerly known as Am Theseus) to its list of targeted entities. According to Equasis, the vessel is owned by AM Asia M6 Ltd, which is linked to Russia-based Salmi Shipmanagement, a company that operates a fleet of 14 general cargo vessels and bulk carriers.

OFAC noted the targeted vessel had completed at least two shipments of stolen Ukrainian grain and identified Russia-based Afghan businessmen as having assisted in "Houthi commercial initiatives in Russia, including arms procurement."

“This network has procured tens of millions of dollars’ worth of commodities from Russia, including weapons and sensitive goods, as well as stolen Ukrainian grain, for onward shipment to Houthi-controlled Yemen,” OFAC stated.

In addition to targeting Zafar, OFAC added five individuals and four entities, including AM Asia M6 Ltd, to its sanctions list.

The Black Sea situation

This move comes shortly after US announcements regarding agreements with Russia and Ukraine to halt attacks in the Black Sea. Analysts had noted that, while the war has severely disrupted trade flows in the region, the potential for a sustainable peace agreement between the two countries could positively impact dry bulk trade.

Allied Shipbroking highlighted in its latest weekly report that war risk premiums for operating in the Black Sea have increased sharply, surpassing 1% of a vessel’s value by October 2024. For a US$50M ship, this translates to an additional US$125,000 in operating costs, which “deters many shipowners from servicing the region.”

This reluctance not only limits vessel availability but also forces operators to reroute ships, often through longer and less efficient routes. These detours lead to increased voyage times and higher overall operating expenses, further complicating the freight market landscape, analysts added.