Meet The Greek Shipping Billionaires Getting Rich Off Russian Oil

Western sanctions on Russian oil sent tker value soaring and helped boost the fortunes of Greek shippers to new highs Forbes now counts of Record 12 greek shipping billionaires seven of them making their debut for the first time hi everybody I'm Britney Lewis with Forbes breaking news joining me now is my Forbes colleague Joo tonini Joo thanks so much for joining me thanks for having me to you wrote about Greek shipping magnetes who have become billionaires in the industry as you pointed out in your reporting Greece has always had a presence in the shipping industry but there's been a boom really in the past few years so can you talk about why yeah so Greece has a really long history with shipping going back centuries obviously that's due to its location right along strategic trade routes and in the Mediterranean um close to the Black Sea as well and one really important point for Greek shipping today is after the second world war really the pioneers of oil tankers and trading oil by sea were uh Greek shippers you know famous names like Aristotle anasis right which everyone knows and they've really been able to continue that leading position for decades since the 1950s and 40s and today we have you know a lot of you know some of the largest shipping firms in the world are Greek not just with tankers but sort of looking across different types of of ships and shipping so why were they able to capitalize so much so more than anyone else what are they shipping so if you look at the sort of global Shipping Fleet uh the largest sort of size of Fleet is owned by Greek companies they they're also the value of their sort of combined Fleet owned by Greeks is around 150 billion um according to data from 2022 it's the largest in the world um they own the largest Fleet of oil tankers the largest Fleet of um liquified natural gas carriers but it's also uh if you look at bulk shipping so that's kind of like any other commodity they're the largest uh it really goes sort of across everything and they benefit from obviously like the the history and the strategy we've talked about um a lot of them are privately owned companies familyowned that have been in this for Generations so they have a long history of knowing how to go around the business uh they're also sort of very smart about when to buy new ships and sell them and timing the market it's really sort of this institutional knowledge and the history of shipping in the country um that has helped them sort of solidify this over the years and it's not just sort of a couple firms it's you know dozens of companies obviously some are much larger than others but it's it's a really important part of the Greek economy and um and on a global scale they managed to keep this position and can you talk about specifically what they are shipping that's making them so rich uh it's all kinds of things I think a lot of the focus in the last couple years has been on oil obviously with the disruption caused by the Russian invasion of Ukraine and then the subsequent Western sanctions um and specifically with oil uh there's a price cap on Russian oil imposed by Western countries so Russian Oil Can can be traded but to you know if you're following this Western price cap it can't be traded above $60 per barrel and then there's other price gaps for other oil products like Diesel and fuel oil um obviously non you know countries that aren't in the west and companies that aren't based in the west don't have to follow that um Greek companies do um so the focus has really been on oil um but like I was saying before um you know a lot of other Commodities so you know you could look at grain um Iron Ore um things that we don't really tend to think about a lot but that are really important to the global economy um if you look also container shipping so like during the pandemic right when everyone was ordering stuff from home um they're really you know the Greeks are really active across the board in shipping our billionaires list came out in April and one of the most interesting s bars was that the war in Ukraine were it's making some of the ultra wealthy even wealthier and as you pointed out Russia faced sanctions after waging its war on Ukraine so did these ship owners hesitate to carry Russian oil at all once the war was launched and what changed their minds because now they are carrying it so it really depends on who you're looking at um one of the uh so the wealthiest person in Greece according to our list U Mar Angela cusa she came out soon after the invasion saying they would not car car any Russian oil um this was before the sanctions and before the price cap I mentioned and um other firm said that they wouldn't and then eventually did and it's important to note first of all that it is not illegal under Western sanctions to trade Russian oil you have to follow this price cap um and as long as you do it is legal to do so because when the West imposed this the idea was to um impose an economic cost on Putin but to not sort of cause a huge um problem for the global oil market and so a lot of Greek ship Greek shipping firms do and did trade Russian oil um according to an analysis by the KF School of Economics um KSC Institute that we've been looking at a lot um if you look at between you know early 2022 and uh the spring of this year Greek firms shipped close to 30% of all Russian oil exports over that period and that's the second out of any country the number one was the UAE but those firms were firms that are set up there but owned by the Russian state-owned oil company so if you're looking at sort of outside of Russia their Greeks are the largest shippers and over that time period if you look at sort of the top five companies that ship the most Russian oil three out of five are Greek so it really varies right some of the larger companies decided not to do it and haven't done it really others sort of really um really did take that opportunity to ship the Russian oil in your story you have a quote from that someone said in an event that kind of talked about the ethical dilemma people were facing ship owners in particular can you talk about that yeah I think the quote you're referring to is sort of looking at you know the fact that this war is a tragedy but it opens opportunities and when they elaborated on it this was um George brok upu at a shipping conference in the summer of 2022 that to sort of explain it simply um before the war most Russian oil went to Europe it was traded you know largely by pipeline some by ships what happened after that when the EU banned Russian oil all that o had to go somewhere and a lot of it was redirected to India largely and also to China and so if you think about it right like getting oil from the northern part of Russia like the Baltic Sea all the way to India takes I think like around 25 days it's a much much longer Journey so that means for a shipper um they can make a lot more money on that Journey right because it's 25 days now it also means that if you're doing that a lot okay it now means you have fewer tankers because a lot of them are busy on those Journeys and so what happened was this sort of kind of like reoriented the whole tanker industry in the world um and two impacts are important to keep note of one is it sent the value of tanker soaring because there was like a huge demand so um it sent the prices of new tankers um to sort of record highs um and another thing it h that happened was there was just a a sort of larger need for tankers so older tankers say like 15 you know 10 to 15 years old which before might have been scrapped because they weren't really needed they were older now have a lot of use or you know have had the last two years and so resale prices went through the roof to sort of record highs um and related to that price Gap I mentioned before um a lot of these companies in obscure places started popping up um that would buy these old tankers for sort of really high prices and then trade Russian oil in violation of that price cap not the Greeks these are sort of other companies but they were buying these ships from a lot of people including the Greeks and so that sent up the value of old tankers up so if you're a Greek ship owner or really any ship owner uh regardless of whether you're trading Russian oil you've seen that the value of your own ships has gone up um you can get rid of older ships for you know way more I think more than double the price you would have gotten before the war um and that's really what we're we're looking at in this story is that you know none of these you know new billionaires that we're putting on and and talking about are you like they've been in their industry for decades but the value of their fleets their tankers and also their other ships has gone up tremendously in the last two years so let's talk about specifically who these shippers are who these new billionaires are and how much their net worths are so we looked at 13 Greek shipping billionaires um um you know they're they range from and this is you know generally speaking in Greece um the wealthiest is mar Angela cusa who I mentioned before uh she was already on our list from a couple years ago but she's worth more this year in our 2024 World billionaires list we also have eight new entries this year um from Greek shipping uh also one who's returning after uh uh you know since 2008 was the last time they were on the list and collectively we think they're worth more than $30 billion and that's more than 12% of the Greek GDP so um largely this is composed of the value of their fleets um but as I think we're going to talk about you know they also invested in in all kinds of different um Industries over time so we will talk about that shortly but talk about first what the local incentives are for these Greek shippers yeah so it's interesting like we said before Greece has a really long history in shipping um and they there is you know there's a lot of incentives for Greek ship owners to make sure that they would stay in the country and not sort of move their companies elsewhere and so there's actually an article that was enshrined in Greece's constitution in the 50s that exempts ship owners from um you know income tax from the income from their shipping companies instead they pay what's called a tonnage tax which is basically a tax based on the size of their ships like how much they can carry uh which means that generally speaking they're able to um you know it's it's a really advantageous tax system for them and um in two years ago in 2022 the Greek government also passed a new law that reduced the voluntary tax on their dividend and capital gains from shipping companies down to 5% from 10% so you know as long as they um keep a management office in Greece they can take advantage of these these tax benefits so these rules really must be music to Greek shippers ears I mean it sounds like a really good time to be a Greek shipper right now obviously so how are they spending this virtually tax-free money so they you know some of them do just sort of stay within shipping um others have really gone into other directions so for example the three most successful uh soccer teams in in Greece olympas Panos and AK Athens are all owned by Greek uh ship owners as well um also if you look at um internationally um evangelos marinakis who owns olympos he also owns a team in uh the English Premier League um and has you know recently invested in a soccer team in Portugal uh outside of that some of the largest media conglomerates in Greece um TV channels and newspapers are also owned by Greek shipping billionaires and um you know that's looking at sort of media and sports right which we know billionaires all over the world regardless of their industry like to invest in um and then also on the personal side you know some of these uh shipping billionaires have enormous you know real estate Empires so um one person who we added to our list again this year George eamu uh he has an estimated $50 million real estate collection homes in um London New York St Barts south of France and um of course where would we be without Yachts right you know these are ship owners classic billionaire purchase yachts so um George procopio for example owns a yach called dream uh which has two uh outdoor swimming pools a helipad um so if you're looking across across the board they' really invested in in all these different kinds of areas a lot of IND industries spanning from Sports to Media everything in between I know we talked about sanctions earlier and how other companies not these Greek billionaires were kind of flouting those sanctions have they shipped these Greek billionaires shipped to any other countries that were under sanctions so it kind of depends when you sort of what time period you're looking at um there was one example you know in 2020 when the US had sanctions on Venezuela Venezuelan oil um the US Treasury Department uh blocked two um ships that were owned by uh two Greek ship owners who who are now on our billionaires list um and then what happened was they came out and said they would no longer ship Venezuelan oil and a few weeks later the treasury Department um removed the sanctions on those ships um historically speaking if you go further back um there was a famous example in the 1960s when um rhia which is now Zimbabwe when it was ruled by white minority regime was under un sanctions and a un embargo um one Greek shaoning family had attempted to uh ship oil to mosm Beque which was then ruled by Portugal and it was going to Beed supposedly shipped by pipeline to Rhodesia they were stopped from doing so and they didn't so it you know one good quote I think the T story is about how you know they will not violate sanctions they will not um they will not sort of break the law and take that kind of risk but sort of within the parameters of what can be done they will always try to find Opportunities to make money so they will definitely tow that line without Crossing it so have they faced any con quences for towing that line well the the example I mentioned Venezuela is sort of one where the the ships were briefly sanctioned sort blocked and then that was removed so far not really I mean if we're looking at Russia for example um the companies that are shipping Russian oil would say we are not breaking the law we have not been subject to any um enforcement by Western countries and we're um complying with the price cap um and that appears to be the case right there's no indication that they have broken any sanctions so they are you know benefiting from the impact that the wars had on sort of the tanker Market as anyone else has whether or not they're trading Russian oil um but there's no indication that they've broken any sanctions or broken any laws so I want to go back to the quote you pointed out earlier where it essentially was the Russia Ukraine war is obviously bad for Humanity but good for business we saw the two-year Mark of the war come and go do you think we're going to continue to see this boom when it comes to Greek shipping yeah I think it's hard to say now I mean like taking a a step back from the Greek ship owners um there's a lot of reports out now that say that you know for this year and probably next year um the values and sort of prices of new tankers is going to keep Rising um on the resale Market you know for the older tankers uh it's sort of decreased a little bit recently but the you know the impact is still there right so these longer Journeys are still happening um what we may see more of going forward is Russia using the so-called Shadow Fleet so older ships owned by obscure companies um that do not follow Western sanctions and the US has sanctioned these um these companies like the ones in BAS Dubai that I mentioned before that are tied to the Russian government so the more they do that um and the Russian oil is traded more by those firms obviously the less it's going to be traded by companies in Greece or anywhere else um that do follow the Western um that they do follow through the Western regulations um but you know I don't think anyone knows how long this war is going to keep going and the impact has really changed a lot over time so I think it's still too early to say jockamo thanks for your reporting I appreciate the conversation thanks Brandy for having me

Channel: Forbes

Views: 109,079

Keywords: Forbes, Forbes Media, Forbes Magazine, Forbes Digital, Business, Finance, Entrepreneurship, Technology, Investing, Personal Finance, greek shipping, russian oil, billionaire, billionaires, Evangelos Marinakis, george prokopiou, george economou, greece, oil, russia, oil tanker

Id: HVq8K0O8Klk

Length: 17min 15sec (1035 seconds)

Published: Mon May 13 2024