Ever since the U.S. introduced sanctions on Russian energy, Moscow has been transporting oil under the radar using clandestine techniques such as shadow fleets. Demand for Russian crude has risen from some countries as Putin has offered oil at highly discounted rates to maintain Russia’s export revenues. Countries such as China and India, who have so far ignored the U.S. sanctions, have been driving this demand. Now, there’s a plan to crack down on Russian shadow fleets to ensure that they cannot circumvent sanctions so easily.
Shadow fleets have long been used to export crude to other parts of the world. Both Iran and Venezuela have been known to use the technique to avoid sanctions, with many of their oil products bound for China and other parts of Asia that do not adhere to U.S. sanctions.
Russia began to use shadow fleets to move its energy products following its 2022 invasion of Ukraine and the subsequent sanctions it faced. To ensure its economy was not severely disrupted, Putin opted to clandestinely continue to export crude to bring in revenue. To achieve this, Russia has been using a fleet of around 700 older, poorly maintained ships without modern identification systems to transport oil while avoiding detection.
The term shadow fleet has a wide range of definitions, but when it comes to Russia’s use of this method it is generally taken to mean “all vessels lacking Western insurance and belonging to non-EU/G7+ companies”. Russia’s shadow fleet “makes use of flags of convenience and intricate ownership and management structures while employing a variety of tactics to conceal the origins of its cargo, including ship-to-ship transfers; automatic identification system blackouts; falsified positions; transmission of false data; and other deceptive or even illegal techniques.”
As well as circumventing the sanctions the U.S. put in place to cause economic damage to Russia in an attempt to encourage Moscow to stop the war with Ukraine – oil and gas contribute around half of the Kremlin’s revenues – the use of shadow fleets poses several threats. Because of the poor regulations, ageing vessels and lack of knowledge about their shipping path they can cause harm to the environment and threaten maritime safety and security. This risk led members of the European Parliament to call for greater maritime surveillance, tighter shipping controls, and stricter sanctions to address the significant environmental and safety threats posed by Russian shadow fleets in October 2024.
In December, Finnish authorities seized a Russian vessel moving through a Finnish bay. The Eagle S ship was found to be transport