russia has increased the capacity of its shadowy oil tanker fleet by almost 70 percent year-on-year, despite recent restrictions on insurers and shipping companies that allowed Moscow to circumvent Western sanctions, new research has shown, the Financial Times reports, UNN writes.
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The volume of Russian oil transported by poorly maintained and insufficiently insured tankers increased from 2.4 million barrels per day in June 2023 to 4.1 million in June 2024, according to a report released by the Kyiv School of Economics (KSE) on Monday.
According to the KSE, by June 2024, 70 percent of Russian marine oil was transported by the shadow fleet, which Russia spent an estimated $10 billion to build. This reportedly included 89 percent of Russia's total crude oil supply, most of which has traded above the $60 per barrel price ceiling since mid-2023, and 38 percent of Russia's refined product exports.
This trend comes as the United States, Canada, Japan, and European allies increasingly target global insurers and shipowners in an attempt to limit Moscow's ability to generate revenue for its war in Ukraine. They have also added companies and individual vessels linked to Russia's shadowy fleet to the sanctions list, the newspaper notes.
"The sanctions against tankers have been quite effective, but the listing campaign was too limited to actually curb Russia's shadow fleet," said Benjamin Hilgenstock, one of the authors of the KSE report.
He added that sanctions should be used "systematically" to enforce requirements for adequate oil spill insurance and thus "address the serious and urgent environmental threat posed by the shadow fleet.
Many of these vessels are regularly observed to ply busy European waters, including the Baltic Sea, the Danish Straits, and the Strait of Gibraltar, increasing the risk of environmental disasters for the EU and neighboring countries.
KSE proposes to create "shadow-free" zones in European waters to reduce these risks. Otherwise, a disaster is simply "waiting to happen on Europe's doorstep," the report argues. "A weakness in the regulatory framework, coupled with the dramatically expanded role of shadow tankers in the Russian oil trade, means that a large-scale environmental disaster is only a matter of time," the report says
The authors of the KSE report argue that in the event of problems, European countries could face cleanup costs reaching billions of euros.
Several accidents involving shadow vessels linked to Russia have already occurred. In March of this year, the 15-year-old shadow tanker Andromeda Star collided with another vessel near Denmark. No oil was spilled because it was heading to Russia, unloaded.
Over the past two years, four Russian shadow fleet vessels have lost engine power, including incidents in the Dardanelles and the Danish Straits.
Shadow fleet vessels carrying oil from other authorized sellers have also faced engine failures, which have exposed maintenance issues and explosions. In May 2023, a 27-year-old Gabonese-flagged vessel with a capacity of 700,000 barrels, which was used to transport Iranian oil, suffered a major explosion off Indonesia. It was empty at the time.
Several shadowy fleet vessels have been involved in oil spills, some of which have fled the scene, causing environmental damage. In 2019, the 23-year-old Ceres I, which had previously been involved in the Iranian oil trade, collided with another tanker near Singapore, turned off its signal and tried to disappear before being caught by the Malaysian coast guard, the publication said.