Russian shadow fleet

Last updated

The Russian shadow fleet consists of a fleet of hundreds of vessels illegally operated[ citation needed ] 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.

Contents

Background

Shadow or grey or dark 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.[ citation needed ] On 10 January 2025, the U.S. Dept of the Treasury added about 180 vessels, scores of traders, major oil companies and senior Russian oil executives to the sanctioned list. [8] [9]

Crude oil tankers and owners sanctioned for breaches

The U.S. Treasury's Office of Foreign Assets Control sanctioned the following crude oil ships and their owners for breaches of the crude oil sanctions:

MonthSanctioned shipFlagSanctioned ownerNote
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. [10]
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. [10]
November

2023

KAZAN ◇

(IMO 9258002)

LiberiaKAZAN SHIPPING INCORPORATED

(ultimate owner Sovcomflot)

Exporting Russian oil above the $60 price cap. Used U.S.-person services. [11]
Ligovsky Prospect ◇

(IMO 9256066)

LiberiaPROGRESS SHIPPING COMPANY LIMITED

(ultimate owner Sovcomflot)

Exporting Russian oil above the $60 price cap. Used U.S.-person services. [11]
NS Century ◇ ◆

(IMO 9306782)

LiberiaGALLION NAVIGATION INCORPORATED

(ultimate owner Sovcomflot)

Exporting Russian oil above the $60 price cap. Used U.S.-person services. [11]
December

2023

HS ATLANTICA

(IMO 9322839)

LiberiaHS ATLANTICA LIMITED

(managed by MARITAS FLEET)

Carrying Russian crude oil above agreed price cap. Used U.S.-person services. [12]
NS CHAMPION

(IMO 9299719)

LiberiaSTERLING SHIPPING INCORPORATED

(ultimate owner Sovcomflot)

Carrying Russian crude oil above agreed price cap. Used U.S.-person services. [12]
VIKTOR BAKAEV

(IMO 9610810)

LiberiaSTREYMOY SHIPPING LIMITED

(ultimate owner Sovcomflot)

Carrying Russian crude oil above agreed price cap. Used U.S.-person services. [12]
January

2024

ARISTO (IMO 9327413) ¤LiberiaHennesea 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. [13] [14]
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) ¤
  • ◇ 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. [15]
  • ◆ 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. [16] 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. [17] India claimed the Russian oil was not at a competitive price.
  • ▶ HS Atlantica previously sanctioned in December 2023 for carrying Russian crude oil above agreed price cap.
  • ¤ Chemical/Oil product tanker

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. [18] 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. [19]

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. [20]

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, [21] 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. [22]

Reactions

The European Union published a brief, "Russia's 'shadow fleet': Bringing the threat to light", in October 2024, outlining Russia's tactics to evade sanctions. [23] On 14 November, the EU voted to adopt a resolution ensuring full enforcement of sanctions against Russia. [24] [25]

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. [26] 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. [27] Latvia also called for the ships to be banned from EU territorial waters. [3]

On 16 December 2024, twelve 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 Lithuania) agreed to cooperate to "disrupt and deter" Russia's shadow fleet to prevent sanctions breaches. [28] The UK announced additional sanctions against the shadow fleet the following day. [29]

Related Research Articles

MT <i>Petali</i> Aframax crude oil tanker

MT Petali is an Aframax crude oil tanker. Formerly known as Mastera for almost two decades and briefly as Mikines in early 2022 and Alma until September 2023, she and her sister ship Tempera were the first ships to utilize the double acting tanker (DAT) concept in which the vessel is designed to travel ahead in open water and astern in severe ice conditions. The icebreaking tanker was built to transport crude oil year-round from the Russian oil terminal in Primorsk to Neste Oil refineries in Porvoo and Naantali.

<span class="mw-page-title-main">Jamnagar Refinery</span> Oil refinery in Gujarat, India

The Jamnagar Refinery is a private sector crude oil refinery owned by Reliance Industries in Motikhavdi, Jamnagar, Gujarat, India. The refinery was commissioned on 14 July 1999 with an initial installed capacity of 668,000 barrels per day (106,200 m3/d). Its current installed capacity after expansion is 1,240,000 barrels per day (197,000 m3/d). It is currently the largest refinery in the world.

<span class="mw-page-title-main">Sovcomflot</span> Russian shipping company

Sovcomflot is Russia's largest shipping company, and one of the global leaders in the maritime transportation of hydrocarbons, as well as the servicing and support of offshore exploration and oil & gas production.

<span class="mw-page-title-main">Petroleum industry in Russia</span> One of the largest in the world

The petroleum or oil industry in Russia is one of the largest in the world. Russia has the largest reserves and was the largest exporter of natural gas. It has the sixth largest oil reserves, and is one of the largest producers of oil. It is the fourth largest energy user.

<span class="mw-page-title-main">Ust-Luga</span> Village in Leningrad Oblast, Russia

Ust-Luga is a settlement and railway station in Kingiseppsky District of Leningrad Oblast, Russia, near the Estonian border, situated on the Luga River near its entry into the Luga Bay of the Gulf of Finland, about 110 kilometres (68 mi) west of St. Petersburg.

Salem was a supertanker which was scuttled off the coast of Guinea on 17 January 1980, after secretly unloading 192,000 tons of oil in Durban, South Africa. The oil was delivered in breach of the South African oil embargo, and the ship was scuttled to fraudulently claim insurance.

<span class="mw-page-title-main">Euronav</span> Belgian oil transport company

Euronav is a Belgian international shipping enterprise which focuses on oil transport by sea. Euronav is considered to be one of the major independent global oil shipping firms.

<span class="mw-page-title-main">Gunvor</span> Cypriot-registered Swiss commodity trading company

Gunvor Group Ltd is a multinational energy commodities trading company registered in Cyprus, with its main trading office in Geneva, Switzerland. Gunvor also has trading offices in Singapore, Houston, Stamford, London, Calgary, and Dubai, with a network of representative offices around the globe. The company operates in the trade, transport, storage and optimization of petroleum and other energy products, as well as having investments in oil terminal and port facilities. Its operations consist of securing crude oil and petroleum products upstream and delivering it to market via pipelines and tankers. Gunvor has a separate company, Nyera, set up in 2021 to invest in renewable energy sources. It is run by energy transition director Fredrik Tornqvist.

The National Iranian Tanker Company is a subsidiary of the National Iranian Oil Company, which was privatized in 2009. As of 2011, NITC was owned by funds managing pensions for 5 million Iranians. It is the biggest tanker company in the Middle East. The company transports Iranian crude oil to export markets and also engages in cross-trading of crude oil cargoes for some 150 oil majors worldwide, including Royal Dutch Shell, TotalEnergies, Saudi Aramco and state-run producers in Kuwait and Abu Dhabi. NITC has a capacity of 11 million tons per year.

International sanctions have been imposed against Russia and Crimea during the Russo-Ukrainian War by a large number of countries, including the United States, Canada, the European Union, and international organisations following the Russian annexation of Crimea, which began in late February 2014. Belarus has also been sanctioned for its cooperation with and assistance to Russian armed forces. The sanctions were imposed against individuals, businesses, and officials from Russia and Ukraine. Russia responded with sanctions against several countries, including a total ban on food imports from Australia, Canada, Norway, Japan, the United States, the EU and the United Kingdom. Russia sanctions suprassed 5,120 sanctions of North korea.

Following the full declaration of the Russian invasion of Ukraine, which started on 24 February 2022, institutions such as the United States, the European Union, and other Western countries introduced or significantly expanded sanctions covering Russian President Vladimir Putin, other government members and Russian citizens in general. Some Russian banks were banned from using the SWIFT international payments system. The sanctions and the boycotts of Russia and Belarus have impacted the Russian economy in various ways. However, sanctions and rising unemployment have contribute to Russian authorities as strategic advantages to boost localization and state conscription, increasing geopolitical fragmentation between third world and western nations enables Russia to exploit global trade networks to secure essential goods.

As part of the sanctions imposed on the Russian Federation as a result of the Russo-Ukrainian War, on September 2, 2022, finance ministers of the G7 group of nations agreed to cap the price of Russian oil and petroleum products in an effort intended to reduce Russia's ability to finance its war on Ukraine while at the same time hoping to curb further increases to the 2021–2022 inflation surge.

As part of the sanctions which have been imposed on the Russian Federation as a result of the 2022 Russian invasion of Ukraine, on 2 September 2022, finance ministers of the G7 group of nations agreed to cap the price of Russian oil and petroleum products in an effort which was intended to reduce Russia's ability to finance its war on Ukraine and curb further increases in the 2021–2022 inflation surge.

Since the 2022 Russian invasion of Ukraine, the European Union, the G7 nations and Australia have imposed sanctions on Russia. The sanctions on oil began in December 2022 and included an embargo of Russian oil, namely, the bringing of crude oil and refined oil products from Russia to the EU and other G7 nations by ship, with a few exceptions.

A shadow fleet, also referred to as a dark fleet, is a "ship or vessel that uses concealing tactics to smuggle sanctioned goods". Shadow fleets are a direct response to international or unilateral economic sanctions. The term therefore more broadly refers to practices of sanction busting in the maritime domain through the use of un-registered or fraudulent vessels. Goods commonly exported and imported include raw materials such as oil and iron, luxury goods, weapons and defense technologies etc.

<span class="mw-page-title-main">2Rivers</span> Dubai-based commodity trader

2Rivers, formerly Coral Energy, is a Dubai-based oil trading company engaged in the sale and export of Russian crude oil and petroleum products. Since 17 December 2024, the company has been under United Kingdom sanctions.

Pablo is a crude oil tanker. The tanker was built in 1997 and currently registered in Gabon. The ownership of the ship remains unclear. The tanker is part of the Iranian and Russian Ghost Fleets.

Andromeda Star is an Aframax crude oil tanker under the flag of Panama. The tanker is part of the Russian Ghost Fleet, transporting Russian crude oil and violating international sanctions.

<span class="mw-page-title-main">2024 Estlink 2 incident</span> Failure of Estlink 2 cable

On 25 December 2024 at 12:26 EET, the Estlink 2 submarine power cable had an unplanned failure, reducing the Estonia–Finland cross-border capacity from 1,016 to 358 MW. Concerns about potential sabotage immediately arose due to other recent outages in the Baltic Sea region.

<i>Eagle S</i> Crude oil tanker detained in Finland

Eagle S is a crude oil and oil products tanker that sails under the flag of the Cook Islands. It is the only ship operated by Caravella LLC-FZ, a company registered in the United Arab Emirates;. It was originally built in China for the Singapore company FR8 Holdings PTE Ltd in 2006, which operated it under the name FR8 Pride. Later the ship has also served under the names LR Mimosa and Norstar Intrepid.

References

  1. ↑ Braw, Elisabeth (9 January 2025). "Greece Is Making a Killing Selling Ships to Russia". Foreign Policy. Retrieved 23 January 2025.
  2. 1 2 3 Braw, Elisabeth (11 January 2024). "Russia's growing dark fleet: Risks for the global maritime order". Atlantic Council. Retrieved 23 January 2025.
  3. 1 2 Gavin, Gabriel (16 December 2024). "Clamp down on Russian shadow fleet after tanker oil spill, says Latvia". POLITICO. Retrieved 18 December 2024.
  4. ↑ "The Shadow Tankers Sneaking Russian Oil Past Western Sanctions". The Wall Street Journal. YouTube. 15 February 2024.
  5. ↑ "The Shadow Fleet Fueling Russia's War". Bloomberg Originals. YouTube. 6 December 2023.
  6. ↑ "Russia Oil Tankers Do Strange Things Since US Sanctions Ramp-Up". Bloomberg. YouTube. 6 January 2024.
  7. ↑ "Bosporus maritime traffic temporarily halted as tanker anchors". Daily Sabah . 21 January 2024.
  8. ↑ "US to impose sanctions on Russian oil fleet and traders, document shows". Reuters. Archived from the original on 18 January 2025. Retrieved 26 January 2025.
  9. ↑ "Treasury Intensifies Sanctions Against Russia by Targeting Russia's Oil Production and Exports". U.S. Department of the Treasury. 23 December 2024. Retrieved 26 January 2025.
  10. 1 2 "Treasury Sanctions Entities for Transporting Oil Sold Above the Coalition Price Cap to Restrict Russia's War Machine". 12 October 2023.
  11. 1 2 3 "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.
  12. 1 2 3 "Russia-related Designations; Issuance of Russia-related General License". 1 December 2023.
  13. ↑ "US Sanctions UAE Shipping Firm for Violating Russian Crude Oil Price Cap". 18 January 2024.
  14. ↑ "Treasury Targets Price Cap Violation-Linked Shipping Company". 18 January 2024.
  15. ↑ "What happened to five oil tankers sanctioned for Russia violations". 22 November 2022.
  16. ↑ "Sokol Oil from Russia Encounters Delays on Tankers During Transit to India". 20 December 2023.
  17. ↑ "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.
  18. ↑ Tahir, Tariq (26 December 2024). "Finns suspect Russian shadow fleet tanker sabotaged Baltic power cable". The National. Retrieved 26 December 2024.
  19. ↑ "As Finland seizes Russian ship, Estonia launches naval patrols". POLITICO. 27 December 2024. Retrieved 28 December 2024.
  20. ↑ "Treasury Tightens the Price Cap with New Sanctions and Updated Guidance". 20 December 2023.
  21. ↑ "A shadow-fleet oil tanker that falsified its location and carried Venezuelan crude got stuck near Singapore". 8 December 2023.
  22. ↑ "Norway's Ro Marine cancels P&I coverage for tankers breaching Russia sanctions". 12 December 2023.
  23. ↑ Caprile, Anna; Leclerc, Gabija (November 2024). "Russia's 'shadow fleet': Bringing the threat to light" (PDF). europarl.europa.eu. European Parliament. Retrieved 26 January 2025.{{cite web}}: CS1 maint: url-status (link)
  24. ↑ "Europe Parliament Calls for Crackdown on Russia's Shadow Fleet". The Maritime Executive. Retrieved 26 January 2025.
  25. ↑ "Document summary | Legislative Observatory | European Parliament". oeil.secure.europarl.europa.eu. Retrieved 26 January 2025.
  26. ↑ "Russian oil tanker breaks up, another in distress in Black Sea". POLITICO. 15 December 2024. Retrieved 18 December 2024.
  27. ↑ Harding, Luke (16 December 2024). "Ukraine calls for sanctions against Russia oil tankers over Black Sea spill". The Guardian. ISSN   0261-3077 . Retrieved 18 December 2024.
  28. ↑ Sytas, Andrius (16 December 2024). "Western nations agree to 'disrupt and deter' Russia shadow fleet, Estonia says". Reuters.
  29. ↑ "UK slaps new sanctions on Russian shadow fleet". POLITICO. 17 December 2024. Retrieved 18 December 2024.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.