Sanctioned Russian LNG Tanker Zarya Plays Chicken with Red Sea, Houthi Threat

So the Zarya is making a run for it. After a bizarre, pointless-looking ballet in the North Atlantic for a good part of the month, the sanctioned Arc7 ice-class carrier is now hugging the North African coast. Destination: Port Said, Egypt. And everyone in the trade knows what that means.

Suez.

This isn’t just any tanker. The Zarya loaded its cargo last month from Arctic LNG 2, a project so thoroughly blacklisted by the US that it’s become a symbol of Washington’s economic war on the Kremlin. And now, this vessel, part of the sprawling, opaque “Shadow fleet” designed to circumvent those very rules, is plowing towards the world’s most volatile shipping lane. A high-stakes gamble, a real roll of the dice for Moscow.

The reality is… the entire LNG market is watching its AIS transponder. Because the Red Sea has been a no-go zone since the Houthis in Yemen decided to start playing pirates with advanced weaponry early this year. LNG carriers, with their high-value, highly flammable cargo, have steered well clear. The cost of insurance alone is prohibitive, never mind the actual risk of a missile strike. The last one to brave a southbound transit was another Russian ship, the Arctic Mulan, back in May. A test run, perhaps?

And for what? To shave time and money off a delivery to the only buyer willing to touch this stuff. China. Beijing has hoovered up 15 cargoes from Arctic LNG 2 since last August, propping up a project the West was hell-bent on strangling in its cradle. These sanctioned Russian ships take the riskiest routes because the economics are brutal otherwise. Going around Africa’s Cape of Good Hope adds weeks and millions in fuel costs to a voyage. So they play chicken.

(This whole cat-and-mouse game… it feels less like modern sanctions enforcement and more like Queen Elizabeth I giving Sir Francis Drake a wink and a nod to go plunder Spanish shipping. State-condoned rule-bending on a global scale.)

The signal data, which we’re all glued to, says Zarya hits Port Said in the next 48 hours. Then comes the moment of truth. Does it turn south into the Bab el-Mandeb strait? Or is this an elaborate feint—maybe an STS transfer in the Med? Unlikely. They’re going to try it. They are absolutely going to try it.

Tom Purdie over at Energy Aspects basically confirmed what we’re all thinking. He said the risks in the Red Sea “remain dynamic, given ongoing regional tensions and the Houthis’ focus on regrouping and re-arming.” He’s right. The Houthis, ironically, are doing more to disrupt these specific Russian energy flows than all of OFAC’s paperwork combined. Purdie added, “If Zarya is successful, it would be a positive step, but it is not sufficient to trigger a rapid recovery of LNG flows through the Red Sea.”

Understatement of the year.

Look, one successful transit doesn’t change the calculus for Shell or BP or any other major with shareholder value to protect. But for Russia? It’s a massive propaganda victory. A middle finger to Washington. It demonstrates that for the right price, and with enough nerve, the sanctions regime is more of a suggestion than a hard border. A real dog and pony show. The question no one is asking out loud is what happens if the Houthis—backed by Iran, a Russian ally—actually hit a Russian state-controlled tanker. Seriously. The geopolitical fallout from that… it’s a can of worms nobody wants to open. Yet here we are, watching a ship sail right for it.