The Baltic Traitor: How a Latvian Citizen Fuels Putin's War Machine by Helping Russia Evade Oil Sanctions and Reap Billions

Photo source: https://theins.ru/

Despite heavy sanctions, Russia continues to bolster its war chest with oil revenues, thanks in large part to the operations of a shadow fleet. This fleet plays a pivotal role in transporting Russian oil to buyers willing to pay above the price cap of $60 per barrel imposed by Western sanctions. As uncovered by The Insider, Latvian citizen Alexey Khlyavin has emerged as a key player in this scheme. Through companies connected to him, he facilitated oil purchases from Surgutneftegaz at prices above the cap, allowing the Russian oil giant to rake in an extra $1.4 billion. Furthermore, Khlyavin’s network of companies has operated tankers shipping Russian oil to India and China, with one tanker even accused by Israeli authorities of delivering oil to Hezbollah and Iran’s Quds Force. Khlyavin also has ties to Russian businessman Mikhail Silantyev, a former head of the state-run Promsyryeimport, which has twice been sanctioned for fuel deliveries to Crimea and Syria.

Khlyavin’s Role in Breaking the Price Cap

The price cap was introduced to limit Russia’s ability to finance its war by restricting its oil revenue while avoiding a sharp rise in global prices. The cap bans companies from Western countries from providing brokerage, transport, and insurance services for Russian oil sales if the price exceeds $60 per barrel. However, Russia has found ways to continue selling oil above the cap by using intermediaries who re-register their companies in Dubai and other locations to skirt the sanctions. The Insider analyzed these entities and found that several European citizens are involved in running these operations.

One of the largest buyers of Russian oil above the price cap is Alexey Khlyavin, a Latvian citizen linked to three Dubai-based companies: Black Pearl Energy Trading LLC, where he served as owner and director, and two affiliated companies, OGC Shipping LLC and Conmar Maritime. In 2023, Black Pearl and its affiliates purchased approximately 38 million barrels of Russian oil from Surgutneftegaz at an average price of $82 per barrel—far above the price cap. In just the first five months of 2024, Black Pearl continued buying another 20.6 million barrels at an average price of $83.7 per barrel.

Thanks to Khlyavin’s operations, Surgutneftegaz earned $1.4 billion more than it would have under the price cap. Russia’s overall annual windfall from selling oil above the price cap is estimated to be between $7 and $11 billion, a significant boost to the country’s war economy.

The Shadow Fleet and Hezbollah Ties

In July 2024, 44 European nations adopted strict measures aimed at curbing the activities of Russia's shadow fleet—tankers used to transport oil sold above the price cap. According to UK government estimates, this shadow fleet consists of around 600 vessels transporting roughly 1.7 million barrels of oil per day. The Insider has linked Khlyavin to companies that own and operate tankers moving Russian oil to ports in India and China.

In a 2022 interview with YoungShip Cyprus, Khlyavin referred to himself as the “general manager” of Sparta Shipmanagement and “chairman and ultimate beneficial owner” of the OGC group. His LinkedIn profile lists him as actively recruiting shipping operators for commercial fleets in Dubai, with his contact email associated with OGC.

Sparta Shipmanagement is registered in Cyprus at the same address as Lagosmarine Ltd. Both companies are managed by the same Greek director, who is also listed as their nominal owner. Lagosmarine, based on its shared address, is linked to a group of shell companies that own tankers such as Clyde Noble, Sagar Violet, and Caroline Bezengi. These ships frequently travel between Russian ports like Primorsk, Ust-Luga, and Kozmino, and ports in India and China. Russian oil purchased by Khlyavin’s Dubai-linked companies has been shipped along the same routes.

In a striking development, Israel has accused one of Lagosmarine’s tankers, Fuga Bluemarine, of transporting Iranian oil for the benefit of Hezbollah and the Quds Force. This accusation came in a document signed by Israeli Defense Minister Yoav Gallant.

Connections to Russian State Enterprises

How did these obscure Dubai-based companies linked to a Latvian trader secure the rights to purchase Russian oil worth billions of dollars?

Khlyavin does not present himself as someone running multi-billion-dollar enterprises. On social media, he portrays himself as a maritime logistics expert and oil trading professional, jetting between Surgut, St. Petersburg, Dubai, Cyprus, and Riga. His social media posts feature photos of him in front of private jets (belonging to a jet rental company) or at the helm of ships.

In his LinkedIn account, Khlyavin describes himself as the beneficiary and CEO of Conrad Management Company. The Insider obtained documents showing residence permits issued by the UAE to several employees of the Russian state company Promsyryeimport, which falls under the Ministry of Energy and handles maritime oil and petroleum product shipments. Promsyryeimport has a history of sanctions violations: before the full-scale invasion of Ukraine, it was sanctioned by Ukraine for supplying fuel to Crimea and by the U.S. in 2018 for facilitating Iranian oil deliveries to Syria.

Today, Promsyryeimport’s management information is hidden in Russian registries. Previously, its director was Mikhail Silantyev, who, according to border crossing data, regularly travels to the UAE.

The Insider contacted Silantyev, but he did not respond to calls or messages. Former deputy director Vladimir Filippov, initially unfazed by the mention of Lagosmarine tankers, changed his tone after the journalist identified themselves and claimed he had no knowledge of the matter. Meanwhile, Denis Deryushkin, former deputy head of the Russian Energy Agency and a past OPEC+ technical committee representative, confirmed recognizing the names of the tankers Clyde and Sagar when contacted. He also confirmed seeing Filippov "three minutes ago" and promised to clarify the situation.

When The Insider reached out to Khlyavin, he responded: “I do not fully understand the nature of the accusations and can assure you that all my actions are conducted within the framework of international law, including compliance with sanctions. Your message seems like a provocation, with all due respect. Thank you and have a good day.”

Legal Implications

Western legal frameworks provide ample provisions to prosecute citizens of democratic countries who assist in circumventing trade embargoes and sanctions. Latvia’s Criminal Code Article 84 imposes criminal liability for evading sanctions imposed by the country or international organizations. Article 4 extends this liability to Latvian citizens even when the crime is committed abroad.

Any claims by Western law enforcement or officials that customs data is “unofficial” and insufficient to initiate criminal proceedings are unconvincing. A U.S. Senate Investigations Subcommittee report from September 10, 2024, mandates that companies use “commercial counterparty screening systems” (likely platforms such as Export Genius and Import Genius) to blacklist specific buyers. If the use of such data is compulsory for private corporations, it is baffling that law enforcement agencies are not using it as a starting point for sanction-evasion investigations.

Moreover, the lists of ships owned by sanctions violators are publicly available via the International Maritime Organization. Authorities in Denmark or Sweden could easily monitor these ships as they pass through the Danish Straits en route from Ust-Luga to India.

The Insider has sent an inquiry to the Danish Maritime Authority.

The fact that Putin’s war machine continues to be fueled by “over-the-cap” dollars highlights the disorganization of Western regulatory agencies and their failure to use even the tools available to investigative journalists, let alone the more sophisticated financial monitoring techniques available to state agencies.

Author: Yulia Smirnova