Since 2023, the volume of oil transported by Russia on old, uninsured vessels has increased by 70%. The amount of Russian oil transported by such tankers increased from 2.4 million barrels per day in June 2023 to 4.1 million in June 2024, according to a KSE report cited by the Financial Times.
This trend comes amid tightening sanctions by the US, Canada, Japan and European allies, which have focused their efforts on restricting global insurers and shipowners to reduce Moscow’s profits from the war in Ukraine.
The sanctions list also includes companies and vessels linked to Russia’s shadow fleet. Many of these vessels regularly pass through European waters, including the Baltic Sea, the Danish Straits and Gibraltar, increasing the risk of environmental disasters for EU countries and their neighbours.
In response, KSE recommends creating shadow fleet-free zones in European waters to reduce these risks.
According to the data, in June 2024, 70% of Russian oil transported by sea was delivered by the shadow fleet, which cost Russia $10 billion to build. This included 89% of all marine crude oil shipments from Russia, most of which were traded at a price above the $60 per barrel limit since mid-2023, and 38% of Russian oil product exports.
By building this fleet, Russia cut ties with countries that supported price caps and relied mostly on domestic insurers as international companies complied with the sanctions regime.
This raises concerns about the quality of insurance, reliability and coverage. Coupled with the fact that the average age of tankers is 18 years, the lack of adequate insurance makes these vessels extremely dangerous.
There have already been several incidents involving shadow tankers linked to Russia. For example, in March 2023, the 15-year-old tanker Andromeda Star collided with another vessel off the coast of Denmark. An oil spill was avoided as the vessel was empty and heading to Russia.
In addition, in May 2023, a 27-year-old tanker carrying Iranian oil exploded near Indonesia. At the time, the vessel was already empty. There have also been cases of engine breakdowns, which indicate inadequate maintenance.
Some shadow fleet vessels have been involved in oil spills and even tried to escape after causing environmental damage. In 2019, the 23-year-old tanker Ceres I, previously involved in the Iranian oil trade, collided with another tanker off Singapore, switched off its signal and tried to escape before being detained by the Malaysian Coast Guard.
