The UK has imposed sanctions on 30 tankers from Russia's shadow fleet, which have transported billions of pounds worth of oil and petroleum products over the past year, the UK government's press service said.

The UK is in the case

It is highlighted that as half of the vessels sanctioned on 25 November have transported more than $4.3 billion worth of oil and petroleum products such as petrol in the past year alone, this is the UK's largest package of sanctions of its kind.

"This step will further restrict the Kremlin's ability to fund its illegal war in Ukraine and its malign activities around the world, and will bring the total number of oil tankers subject to UK sanctions to 73 - more than any other country," the press service said.

The statement came as Foreign Secretary David Lemmy is using the G7 foreign ministers’ meeting in Italy to push other countries to keep up the pressure on Russia’s military machine, alongside efforts to increase military and financial support for Ukraine.

He said the UK sanctions were working and Russia was becoming increasingly dependent on countries such as North Korea and Iran for military hardware, and was even forced to send North Korean troops to support an illegal invasion.

According to former Cabinet Office Reforms expert Maxim Gardus, these actions are further depriving the Kremlin of the ability to finance its criminal war against Ukraine. Russia’s oil fleet, which previously evaded international scrutiny, is now under intense scrutiny. And importantly, it’s not just about war: these vessels, which flout basic safety standards, pose a threat to global trade and the environment.

EU response

The EU is also facing problems. The European Parliament recently called for targeted restrictions on such vessels, their owners, operators, financial institutions and insurance companies in the next sanctions package. It also proposed banning uninsured tankers from sailing in European waters and significantly increasing monitoring using drones and satellites.

As part of the 15th sanctions package, the EU is proposing to list more than 50 individuals and about 30 legal entities, freeze their assets and impose a travel ban on them.

The new set of measures, which could still be amended, also includes a ban on access to European ports and services for more than 45 Russian oil tankers, as the bloc and its allies work to reduce Moscow’s oil revenues and its ability to circumvent the price cap on Russian crude.

Other proposed sanctions would target Russian oil companies.

In particular, the EU is proposing trade restrictions on about 30 entities that help Moscow obtain prohibited technologies used in or necessary for the creation of weapons discovered in Ukraine. According to the documents, the list includes firms from Russia, Serbia, Iran, India, Thailand, the United Arab Emirates, China and Hong Kong. Some of the Chinese companies to which the EU plans to apply restrictions are already under sanctions by the United States and Great Britain.

The aggressor’s “shadow fleet”

It is obvious that the aggressor country is trying in every way to escape the consequences of the sanctions packages that have been introduced since the beginning of the full-scale invasion of Ukraine. This is how the term “shadow fleet” arose.

The sanctions, albeit slowly, are showing an effect. Individual tankers are idle at sea, and Russia is forced to resort to cooperation with isolated countries such as North Korea and Iran to somehow support its military machine.

Recently, Bloomberg reported that the area near the Greek islands of Lesbos and Chios in the Aegean Sea is being used for clandestine transshipment of Russian oil.

According to analysts, about a million barrels of crude oil, fuel oil and other petroleum products are transshipped here every month.

Experts emphasize the environmental risks associated with this practice. The increase in the number of transshipments between ships increases the risk of accidents, which can have serious consequences for the environment and creates challenges for ship insurance.

In the South China Sea, 60 km off the coast of Malaysia, there is the world's largest center of "shadow transshipment" of oil. It is used to circumvent international sanctions, Bloomberg reported again.

The number of oil transshipment operations between tankers in this zone has doubled since 2020. In just nine months of 2024, about 350 million barrels of oil passed through this center, the total value of which is estimated at at least $20 billion.

The transshipment is carried out by Iranian tankers, which transfer the oil to other vessels. These vessels deliver sanctioned oil, mainly to Chinese ports. It is not difficult to guess whose oil is being transshipped from tanker to tanker.

Russian oil exports by sea have hit their lowest level since July, falling to a two-month low due to reduced supplies to India, Bloomberg reports.

The average monthly export volume in the four weeks to November 24 fell by about 150,000 barrels per day. The largest reduction was observed in western Russian ports - up to 25% of the monthly average.

Since most export cargoes come from western terminals, this has had a sharp impact on supplies to India. Shipments from the Baltic, Arctic and Black seas have fallen below 1 million barrels per day, which will still remain significantly lower (by at least 500,000 barrels) compared to mid-October.

The publication emphasized that these changes are taking place against the background of upcoming talks between OPEC+ oil ministers, where it is expected that they will discuss the possibility of extending production restrictions. Russia has already announced plans to cut output in October and November to offset past overproduction, which may have contributed to the decline in exports.

According to government data, last month’s output was close to the target set by Russia under OPEC+.

The UK has also added two more Russian insurers, Alfa Insurance Group Plc and VSK, to its sanctions list. Despite the sanctions, four of these companies are licensed to insure marine vessels in India.

In total, 27 tankers carried 20.5 million barrels of Russian oil in the week to 24 November, according to ship tracking data and reports from port agents.

Concerns are growing

Andrian Prokip, an energy expert at the Ukrainian Institute for the Future, explains that the shadow fleet, which ensures the export of Russian oil in circumvention of sanctions, continues to grow. And the mechanism for monitoring sanctions remains weak, if not weakened even more.

According to a study conducted by S&P Global Commodities at Sea & Maritime Intelligence Risk Suite, 889 tankers with a deadweight of more than 27,000 tons were identified, which were likely used to transport oil subject to sanctions. The total deadweight of these vessels is 111.6 million tons, which is about 17% of the total volume of the world's oil tanker fleet. More than 80% of the oil that Russian companies export by sea is supplied in circumvention of sanctions, precisely by these shadow fleet vessels.

At the same time, sanctions have been imposed on less than a hundred tankers.

“The coalition of countries continues to make attempts to combat the shadow fleet. The Greek Navy has decided to extend the maneuvers in the Laconian Gulf for another four months. Initially, the exercises were supposed to end on November 15, but now they will last until mid-March, a total of more than ten months since their launch. This region has acquired the status of one of the alternative routes used to evade EU sanctions against Russia. In May, Greece announced the start of exercises in this area and imposed a ban on entry for commercial vessels,” Prokip emphasizes.

But the problem is that while on the one hand the EU countries are trying to combat the shadow fleet, they are transshipping significant volumes of sanctioned Russian oil. Thus, a quarter of the shadow fleet vessels are registered under the flags of EU countries. This allows the ships to appear independent of Russia, making it harder for regulators to track the cargo and its links to Russian oil sources. Russia also uses the tactic of constantly changing the flags of its vessels to make it harder to control.

In a resolution adopted on 14 November 2024, the European Parliament called for stronger measures against these vessels in future EU sanctions packages, covering not only the vessels themselves but also their owners, operators, managers, as well as accounts, banks and insurance companies.

Parliament also calls for “systematic sanctions” against vessels that sail in EU waters without proper insurance, and insists on strengthening the EU’s monitoring capabilities, including through the use of drones and satellite technology, as well as targeted inspections at sea.

“Members of the European Parliament are proposing that EU countries identify ports that can handle ships under sanctions and transport crude oil and liquefied natural gas, as well as carry out the seizure of illegal cargo without compensation. This week, tough discussions are likely to take place within the International Maritime Organization. Two weeks ago, at a meeting of the governing bodies of the International Oil Pollution Compensation Funds, the issue of the increasing transportation of oil by unsafe and uninsured ships dominated. The governing bodies of the funds called on member states, many of which are the same representatives who are meeting at the IMO this week, to redouble their efforts to address this problem. The size of the shadow fleet is currently growing and the share of oil that the Russians manage to sell to circumvent sanctions is also growing. Concern about this fact is growing,” the expert states.

Olena Marchenko, specially for "Ukrainian Energy"

Tags:Russia