Russo-Ukrainian War Enters Third Year Without End in Sight
Three years into the Russo-Ukrainian war, there is no obvious end in sight. The conflict has evolved into two parallel fights: one on the ground, where Russia’s cloud of drones battles Ukraine’s cloud of drones, and another at range, where Russia attacks Ukrainian civilian infrastructure to divert resources away from fighting.
Ukraine’s Ranged Attacks Target Russian Oil and Gas Production Infrastructure
Ukraine’s increasingly strong ranged attacks are aimed at Russia’s oil and gas production infrastructure. For Ukraine, the crucial variables in the winter months are heat and power: can it heat its population and provide enough power for them to live and for industry to work? Meanwhile, for Russia, the key issue is money: can its oil and gas industry earn enough to sustain the expensive war machine, now between 40 and 70 per cent of the state budget?
Russia’s Shadow Fleet Evades Price Cap on Oil Exports
Russia sells most of its seaborne oil exports through a “shadow fleet” of ageing uninsured ships, which accounts for 70 per cent of Russian seaborne oil exports. This shadow fleet evades the price cap imposed by the West, choosing instead to sell oil at market prices. The added value to Russia from trading at market prices rather than the price cap is around $4 billion.
Targeting the Shadow Fleet’s Baltic Route
RUSI’s Jack Watling has suggested that the shadow fleet’s portion of trade going through the Baltic can be reduced by targeting this route. At least two fifths of Russian seaborne exports go through the Baltic sea, and must pass Finland, Estonia, Poland, Sweden, and Norway – all strong supporters of Ukraine’s defence against Russian aggression.
Environmental Treaty to Prevent Shadow Fleet Sailing
Watling suggests an environmental treaty to prevent the shadow fleet sailing. International law poses some problems, as the 1857 Copenhagen convention requires ships’ “innocent passage” through the Danish straits, and the UN Convention on the Law of the Sea requires states to allow innocent passage through their 12 nautical mile limit territorial waters.
Preventing Unseaworthy Ships from Passing
Preventing unseaworthy ships from passing the straits with polluting cargo does not prevent Russia from navigating them. It just requires them to use acceptably safe ships to do so. After all, Russia has the option of exporting this oil at the price cap on insured, safe ships that don‘t carry the risk of pollution.
Reducing Russian Defence Budget
If implemented, what difference could it make to the Russian defence budget? The total value of the Baltic shadow fleet trade is $20 billion per year. Reducing the price cap would add around $4 billion in revenue for Russia’s oil and gas industry, which is a significant portion of the state budget.
Original Article: Garvan Walshe: How to stop Russia’s ‘shadow fleet’ funding their war machine — Conservativehome