January 10, 2025
Russia's shadow fleet: Sanctions circumvention, environmental threats and war financing thumbnail
Economy

Russia’s shadow fleet: Sanctions circumvention, environmental threats and war financing

Russia’s shadow fleet: Sanctions circumvention, environmental threats and war financingRussia uses more than 1,000 vessels to circumvent sanctions, which is 17% of the world’s oil tanker fleet. The shadow fleet has
brought Russia more profit than Ukraine has received in international aid since the beginning of the war.
”, — write: unn.ua

Russia has earned more from the shadow fleet than Ukraine has received in international aid since the start of the full-scale war. This demonstrates how the Kremlin circumvents sanctions by continuing to finance the war despite restrictions from Western countries. 

UNN has collected everything about the structure, threats and functions of the “shadow fleet” of the Russian Federation.

What is the shadow fleet and what is its scope?

It is a network of vessels that help to circumvent sanctions and international restrictions. The shadow fleet of the Russian Federation began to form even before the imposition of sanctions, but its active expansion occurred after 2014, when Russia annexed Crimea and faced restrictions on the transportation of oil and other goods. After the outbreak of a full-scale war against Ukraine, the fleet’s capabilities increased significantly, and it became a key tool for ensuring the economic stability of the terrorist country.

Shadow fleet vessels often do not have official registration or hide the real one, change the flag and falsify documents. This is done to avoid control. The vessels are used to transport oil, gas, weapons and other goods. Ships of the Russian shadow fleet are often registered under the flags of countries with loyal conditions to circumvent international sanctions. The most common among them are Panama, Liberia, the Cook Islands, Malta, and St. Kitts and Nevis, where the registration process is simplified. The tanker fleets of Iran and Venezuela, which have experience in circumventing sanctions, are also involved. In addition, vessels previously owned by European or Asian companies but purchased through third countries are used.

The main features of such vessels are: 

–        usually belong to offshore companies that cannot be directly linked to Russia;

–        ships regularly turn off their AIS (Automatic Identification System) systems to hide their location and route;

–        Some tankers use fake documents or duplicate the identification numbers of legitimate ships;

–        oil or other resources are transshipped in the high seas, which makes it difficult to monitor such activities.

In , the report of the Main Intelligence Directorate of the Ministry of Defense stated that the shadow fleet of the Russian Federation includes more than a thousand mostly outdated, poorly maintained vessels without proper insurance, with confusing ownership and management structures located in “friendly” jurisdictions, under “convenient” flags, and with a total deadweight of more than 100 million tons (approximately 17% of the world’s oil tanker fleet).

Threats of the Russian shadow fleet

Russia’s shadow fleet has already caused serious damage to global security and the environment. One example is the damage to the Estlink 2 submarine cable that occurred on December 25, 2024. This led to a decrease in electricity supplies to Estonia. Due to suspicion of involvement in the incident, the Finnish authorities detained the Eagle S tanker, which is part of the Russian shadow fleet. The vessel was declared unseaworthy due to 32 malfunctions, and it was recognized that it had damaged a cable in the Baltic Sea. 

These vessels have also caused numerous oil spills in international waters. For example, the tanker Innova, which was carrying 1 million barrels of oil, left an oil slick 100 km off the coast of Scotland. Another incident was recorded off the coast of Italy, when the tanker Aruna Gulcay left behind an oil slick 47 km long. 

And on January 10 this year, the tanker Eventin, which is also part of Russia’s shadow fleet, carrying as much as 99 thousand tons of oil under the Panamanian flag, crashed off the German island of Rügen and began to drift off the German coast. To evacuate it, the German authorities sent a multipurpose vessel and a tug from the Federal Waterways and Shipping Administration.

Money for oil exports for the war against Ukraine

High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell stated, that Russia’s circumvention of sanctions also allows it to “maintain its war machine.” According to him, the EU sees some progress in combating this, but more efforts are still needed. Russian weapons often contain Western electronic components, so it is important to strengthen controls. Borrell emphasized that the fight against this should start within the EU, and companies that supply critical components to other countries should be more careful.

At the same time, the Financial Times wrote that Russia increased the capacity of its shadow oil tanker fleet by almost 70% in 2024, despite restrictions on insurers and shipping companies that were supposed to make it more difficult to circumvent Western sanctions. The volume of Russian oil transported by poorly maintained and insufficiently insured tankers increased from 2.4 million barrels per day in June 2023 to 4.1 million in June 2024, according to a report published by the Kyiv School of Economics (KSE). 

President of Ukraine Volodymyr Zelenskyy statedthat Russia has received more profit from the shadow fleet than Ukraine has received in aid since the beginning of the full-scale war. 

“Russia’s shadow fleet has brought it more money than the entire amount of support that Ukraine has received since the beginning of the full-scale war. The issue of the effectiveness of sanctions can help us the most,” Zelensky said.

The President noted that Russia earns between $10 and $12 billion a month from the shadow fleet.

Countering the shadow fleet

Western countries are actively tightening control over the maritime transportation of Russian oil through a number of measures, including the introduction of transponder monitoring to track ships, restrictions on insurance for tankers carrying Russian oil, and improved systems for detecting oil overloads in international waters. The UK and US initiatives provide for fines for companies involved in these schemes, and satellite monitoring allows for more frequent detection of violations and illegal shipments.

By the way, in October 2024, the United Kingdom imposed sanctions against 18 Russian oil tankers and 4 liquefied natural gas tankers. According to the UK Foreign Office, these were “the largest sanctions against Putin’s shadow fleet” at the time. These 18 vessels will no longer be able to call at British ports and access leading British maritime services. This brings the total number of oil tankers under sanctions to 43.  

On December 16, 2024, the EU approved the 15th package of sanctions, which includes restrictions against vessels of the Russian shadow fleet. The EU Council added 52 new vessels to the list, which are now subject to a ban on access to ports and the provision of maritime-related services. The total number of vessels subject to sanctions has reached 79. Following the recent damage to an electrical cable in the Baltic Sea and the detention of an oil tanker by Finnish authorities, the European Union warned that additional sanctions may be imposed. The Ministry of Foreign Affairs of Ukraine called for tougher sanctions against Russia’s shadow fleet in connection with the tanker accident in the Kerch Strait. According to Foreign Ministry spokesperson Heorhiy Tykhyi, the use of tankers increases the risk of environmental disasters. He also appealed to the international community to increase pressure on Russia to stop its illegal activities in the temporarily occupied territories of Ukraine and bring it to justice for the transboundary damage to the environment and people. 

Recall

On December 15, 2024, Russian oil tankers Volgoneft-212 and Volgoneft-239 sank in the Kerch Strait

As a result, more than 4000 tons of fuel oil got into the Black Sea. On January 9, 2025, large spots of fuel oil pollution were recorded near the southern coast of the temporarily occupied Crimea. According to satellite imagery, the fuel oil film was visible from Cape Aya to Cape Foros, in the Yalta Bay, as well as in the areas of Gurzuf and Ayu Dag.

After the accident of two tankers and a fuel oil spill in the Kerch Strait, Russia continues to transport oil products. 

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