Russian shadow fleet
The Russian shadow fleet consists of a fleet of hundreds of illegally operated vessels operated by Russia to evade policing following the enaction of the 2022 Russian crude oil price cap sanctions enacted by the United States, United Kingdom, and European Union in response to Russian invasion of Ukraine.
Background
Shadow or grey or dark or illicit fleets already existed, used by Iran and Venezuela to try to get around international sanctions. Russia was aware that any sanctions against their country would result in a need to control tankers to export crude and processed oil. Tankers approaching their end of life span were purchased by Russia, Russian oil companies or opportunists who could then rent them out for a large fee to maintain the flow of oil exports. The price of old tankers rose, with vendors making large profits from their sales.[1] By the end of 2022 there were over 600 ships in the shadow fleet, 400 of which were crude oil tankers. Since then the numbers have increased with estimates of 1,100 to 1,400 ships by December 2023.[2] Only 118 of them have been sanctioned by the United States, European Union, or United Kingdom with only three sanctioned by all three according to the Kyiv School of Economics.[3]
A major problem with the Russian shadow fleet is insurance, western countries have minimum criteria for insurance, which includes verification of the condition of the ship.[4][5] Two thirds of ships carrying Russian oil have "unknown" insurers.[citation needed] The ships are generally old and more prone to breakdown or leakage.[6] in January 2024 the 18 year old sanctioned Peria had an anchor malfunction, leaving the ship stranded in the Bosphorus, closing all traffic.[7] Shadow ship owners disguise the true owners and do not feel obliged to maintain the ships to a high standard. Turning off automatic identification systems and undertaking open sea ship to ship transfers of oil increase risks of collisions and spillages.[2]
Certain flags of convenience are favored. Gabon has more than doubled its ships registry in 2023 with an estimated 98% of tankers considered high risk with no identifiable owner. The number of incidents affecting these tankers has increased to around two a month, with groundings, collisions, fire and engine failures, recovering the cost of rescuing these ships is doubtful due to the unknown owner and the unknown insurance, if any.[2]
Sanctioning vessels and associated companies for breaches
Vessels, their owners and associated companies involved in breaches of the sanctions are from autumn 2023 being investigated and sanctioned.
Crude oil tankers and owners sanctioned for breaches
The US Office of Foreign Assets Control have sanctioned the following crude oil ships and their owners for breaches of the crude oil sanctions:
| Month | Sanctioned ship | Flag | Sanctioned owner | Note |
|---|---|---|---|---|
| October
2023 |
SCF Primorye ◇
(IMO 9421960) |
Liberia | Lumber Marine SA
(ultimate owner Sovcomflot) |
Carrying Novy Port crude oil priced above $75 per barrel. Used U.S.-based service provider.[8] |
| Yasa Golden Bosphorus ◇
(IMO 9334038) |
Marshall
Islands |
Ice Pearl Navigation Corp
c/o Turkey |
Carried ESPO crude oil priced above $80 per barrel. Used U.S.-based service provider.[8] | |
| November
2023 |
KAZAN ◇
(IMO 9258002) |
Liberia | KAZAN SHIPPING INCORPORATED
(ultimate owner Sovcomflot) |
Exporting Russian oil above the $60 price cap. Used U.S.-person services.[9] |
| Ligovsky Prospect ◇
(IMO 9256066) |
Liberia | PROGRESS SHIPPING COMPANY LIMITED
(ultimate owner Sovcomflot) |
Exporting Russian oil above the $60 price cap. Used U.S.-person services.[9] | |
| NS Century ◇ ◆
(IMO 9306782) |
Liberia | GALLION NAVIGATION INCORPORATED
(ultimate owner Sovcomflot) |
Exporting Russian oil above the $60 price cap. Used U.S.-person services.[9] | |
| December
2023 |
HS ATLANTICA
(IMO 9322839) |
Liberia | HS ATLANTICA LIMITED
(managed by MARITAS FLEET) |
Carrying Russian crude oil above agreed price cap. Used U.S.-person services.[10] |
| NS CHAMPION
(IMO 9299719) |
Liberia | STERLING SHIPPING INCORPORATED
(ultimate owner Sovcomflot) |
Carrying Russian crude oil above agreed price cap. Used U.S.-person services.[10] | |
| VIKTOR BAKAEV
(IMO 9610810) |
Liberia | STREYMOY SHIPPING LIMITED
(ultimate owner Sovcomflot) |
Carrying Russian crude oil above agreed price cap. Used U.S.-person services.[10] | |
| January
2024 |
ARISTO (IMO 9327413) ¤ | Liberia | Hennesea Shipping Co Ltd
Dubai, United Arab Emirates (ultimate owner Sovcomflot) designated pursuant to E.O. 14024 for operating or having operated in the marine sector of the Russian Federation economy. |
Beneficially owned by Hennesea, as property in which Hennesea has an interest.[11][12]
▶ HS Atlantica previously sanctioned in December 2023 for carrying Russian crude oil above agreed price cap. ¤ Chemical/Oil product tanker |
| HAI II (IMO 9259599) | ||||
| HS ARGE (IMO 9299745) | ||||
| HS ATLANTICA (IMO 9322839) ▶ | ||||
| HS BURAQ (IMO 9381732) | ||||
| HS ESBERG (IMO 9410894) | ||||
| HS EVERETT (IMO 9410870) | ||||
| HS GLORY (IMO 9249087) | ||||
| HS LEGEND (IMO 9381744) | ||||
| HS STAR (IMO 9274446) | ||||
| LA PRIDE (IMO 9274616) | ||||
| MONA (IMO 9314818) ¤ | ||||
| NELLIS (IMO 9322267) | ||||
| OSPEROUS (IMO 9412995) | ||||
| PERIA (IMO 9322827) | ||||
| SARA II (IMO 9301615) ¤ | ||||
| SENSUS (IMO 9296585) ¤ | ||||
| UZE (IMO 9323338) ¤ |
Notes:
◇ Since being sanctioned, a number of ships have ceased operations. In mid November 2023, SCF Primorye is in Russia, anchored near Murmansk. Yasa Golden Bosphorus unloaded and is now on charter to Exxon Mobil Corp and is waiting off Mexico. Kazan and Ligovsky Prospect are both in dock in China and NS Century was off Sri Lanka looking for a port to unload at.[13]
◆ In mid December NS Century, whose original destination was Vadinar in India, was still waiting off Sri Lanka and had been joined by two other crude tankers owned by Sovocomflot. In addition the Krymsk has been stationary off the port of Paradip in India since 4 December and has been joined by the Nellis. These ships hold 5 million barrels of crude oil.[14] Reportedly Russia does not want to be paid in rupee's, preferring UAE dirham's, however Sakhalin 1 LLC has been unable to open a bank account.[15] India claimed the Russian oil was not at a competitive price.
Finnish Customs said the tanker Eagle S is part of the shadow fleet after Finnish authorities launched an investigation into its potential sabotage of the underwater power cables between Estonia and Finland in the 2024 Estlink 2 incident.[16] The vessel was seized by Finnish authorities in the aftermath as the Estonian Navy launched an operation to protect undersea cables in the Baltic Sea.[17]
Oil traders
On 20 December 2023 the US Department of the Treasury announced sanctions against three companies that have traded Russian oil that had been sold at a price that did not comply with the price cap rules, including Voliton DMCC from the UAE and Bellatrix Energy Limited and Covart Energy Limited of Hong Kong. Covart owns oil products tanker Sanar 15 (IMO 9777670) which is also sanctioned.[18]
Insurance of tankers
Suspected breaches of sanctions by insurance companies are investigated. Sometimes the insurance company is provided with false information regarding the source of the cargo,[19] its price, the destination, and even the ships name and IMO number when an application for insurance is made.
Insurance company Ro Marine, based in Oslo, Norway, cancelled insurance on three tankers in December 2023, identified as non-compliant with oil price cap or dark trading allegations and is monitoring seven more.[20]
Reactions
Two boats believed to be part of Russia's shadow fleet caused an oil spill with severe environmental damage in the Black Sea in December 2024 due to the negligence by their Russian operators.[21] Following the major environmental crisis caused by the ships, the worst this century in the Black Sea region, Ukraine called for the international community to take action to deter the fleet.[22] Latvia also called for the ships to be banned from EU territorial waters.[3]
On December 16, 2024, twelve democratic countries consisting of Britain, Germany, Poland, the Netherlands, the Nordic countries (Denmark, Finland, Iceland, Norway, and Sweden), and the three Baltic states (Estonia, Latvia, and Estonia) agreed to cooperate to "disrupt and deter" Russia's shadow fleet to prevent sanctions breaches.[23] The UK announced additional sanctions against the shadow fleet the following day.[24]
References
- ^ "Greece Is Making a Killing Selling Ships to Russia". 11 September 2023.
- ^ a b c "Russia's growing dark fleet: Risks for the global maritime order". 11 January 2024.
- ^ a b "Clamp down on Russian shadow fleet after tanker oil spill, says Latvia". POLITICO. 2024-12-16. Retrieved 2024-12-18.
- ^ "The Shadow Tankers Sneaking Russian Oil Past Western Sanctions". The Wall Street Journal. YouTube. 15 February 2024.
- ^ "The Shadow Fleet Fueling Russia's War". Bloomberg Originals. YouTube. 6 December 2023.
- ^ "Russia Oil Tankers Do Strange Things Since US Sanctions Ramp-Up". Bloomberg. YouTube. 6 January 2024.
- ^ "Bosporus maritime traffic temporarily halted as tanker anchors". Daily Sabah. 21 January 2024.
- ^ a b "Treasury Sanctions Entities for Transporting Oil Sold Above the Coalition Price Cap to Restrict Russia's War Machine". 12 October 2023.
- ^ a b c "Balkans-related Designations; Russia-related Designations and Designation Update; Issuance of Russia-related General License, Balkans-related General Licenses, and Frequently Asked Question". 16 November 2023.
- ^ a b c "Russia-related Designations; Issuance of Russia-related General License". 1 December 2023.
- ^ "US Sanctions UAE Shipping Firm for Violating Russian Crude Oil Price Cap". 18 January 2024.
- ^ "Treasury Targets Price Cap Violation-Linked Shipping Company". 18 January 2024.
- ^ "What happened to five oil tankers sanctioned for Russia violations". 22 November 2022.
- ^ "Sokol Oil from Russia Encounters Delays on Tankers During Transit to India". 20 December 2023.
- ^ "Russia wants to topple dollar dominance, but it isn't even able to deliver oil to India with alternative currencies". Business Insider. 27 December 2023.
- ^ Tahir, Tariq (26 December 2024). "Finns suspect Russian shadow fleet tanker sabotaged Baltic power cable". The National. Retrieved 26 December 2024.
- ^ "As Finland seizes Russian ship, Estonia launches naval patrols". POLITICO. 2024-12-27. Retrieved 2024-12-28.
- ^ "Treasury Tightens the Price Cap with New Sanctions and Updated Guidance". 20 December 2023.
- ^ "A shadow-fleet oil tanker that falsified its location and carried Venezuelan crude got stuck near Singapore". 8 December 2023.
- ^ "Norway's Ro Marine cancels P&I coverage for tankers breaching Russia sanctions". 12 December 2023.
- ^ "Russian oil tanker breaks up, another in distress in Black Sea". POLITICO. 2024-12-15. Retrieved 2024-12-18.
- ^ Harding, Luke (2024-12-16). "Ukraine calls for sanctions against Russia oil tankers over Black Sea spill". The Guardian. ISSN 0261-3077. Retrieved 2024-12-18.
- ^ Sytas, Andrius (2024-12-16). "Western nations agree to 'disrupt and deter' Russia shadow fleet, Estonia says". Reuters.
- ^ "UK slaps new sanctions on Russian shadow fleet". POLITICO. 2024-12-17. Retrieved 2024-12-18.