Russia increases shadow fleet of tankers by 70% despite sanctions – KSE study
Russia has increased the capacity of its shadow fleet of oil tankers by nearly 70% compared to last year, despite sanctions against insurers and shipping companies, according to a study by the Kyiv School of Economics (KSE).
The volume of Russian oil transported by poorly maintained and inadequately insured tankers has grown from 2.4 million barrels per day in June 2023 to 4.1 million barrels in June 2024.
This trend has emerged despite sanctions imposed by the United States, Canada, Japan, and European allies on global insurers and shipowners, aimed at curbing Russia's ability to generate revenue for its war in Ukraine. "Sanctions on individual tankers, which the US, EU, and UK have imposed in recent months, have not changed thissituation as they are too limited in nature and Russia has been able to replace the 'lost' capacities," said one of the study's authors, Benjamin Hilgenstock.
Hilgenstock added that sanctions need to be applied systematically to ensure adequate insurance coverage for oil spills and to address the "serious and widespread environmental threat posed by the shadow fleet."
Many of these vessels regularly operate in European waters, including the Baltic Sea, Danish straits, and the Strait of Gibraltar, increasing the risk of environmental disasters for the EU and neighboring countries.
KSE proposes creating "shadow-free" zones in European waters to reduce these risks.
"The weak link in the regulatory framework, together with the dramatically expanded role of shadow tankers in the Russian oil trade, means that a major environmental disaster is only a question of time," the experts write.
In June 2024, 70% of Russian maritime oil was transported by the shadow fleet, which KSE estimates cost Russia $10 billion to create. This represents 89% of the total volume of Russian crude oil supplies, most of which are traded above the $60 price cap, and 38% of Russian oil product exports.
The combination of the average age of the tankers, which is 18 years, and the lack of adequate insurance makes the vessels in Russia's shadow fleet extremely dangerous, according to the KSE study.
The authors of the KSE report assert that if problems arise, European states could face cleanup costs amounting to billions of euros.
Several incidents involving shadow vessels linked to Russia have already occurred. In March 2024, a 15-year-old shadow tanker, "Andromeda Star," collided with another vessel near Denmark. No oil was spilled because the tanker was already unloaded and on its way to Russia.
In July 2024, the United States began imposing sanctions on Russia's shadow fleet of LNG tankers. Seven gas carriers that Russia planned to use for exports were targeted.
In September, it was reported that the United States plans to strengthen restrictions on the trade of Russian oil, particularly the shadow fleet used by Moscow to export crude.
Tankers that were subject to Western sanctions have started returning to the export of Russian oil after a long hiatus. After successful deliveries to China, they are being used more frequently.
