Shadow Fleet Grows to 1,200-1,600 Tankers, Estimates Suggest
The shadow fleet of vessels used by Russia, Venezuela, and Iran to evade Western sanctions has grown significantly since the Ukraine war began in 2022. According to estimates from industry sources and analysts, including Lloyd’s List Intelligence and shipbroker Gibson, the size of the fleet now stands at between 1,200 and 1,600 tankers. This represents an estimated fifth of the overall global tanker fleet.
The growth of the shadow fleet has slowed year-on-year as the list of sanctions has grown and sales of second-hand ships have been under more scrutiny from authorities and legal compliance teams. However, the potential for profit remains a lure for some ship companies, with dozens of tankers joining the shadow fleet this year compared to hundreds in previous years.
Sanctions Target Russian Oil Exports
The harshest Western sanctions yet target Russia‘s oil exports, adding to the difficulty of finding suitable vessels. The Group of Seven countries has imposed a cap over what price level Russian oil can be sold at, making it more challenging for ship operators to find profitable deals. This has led some established players to stay away from the shadow fleet, while others with little experience of the shipping market may be willing to engage in risky operations.
Regulators Closing the Net
Regulators are increasing their efforts to track and monitor the shadow fleet’s activities. Anna Giacomello, analyst with British maritime cyber defence and risk intelligence company Dryad Global, noted in a July report that “regulators are closing the net.” This increased scrutiny has made it more challenging for ship operators to find suitable vessels and avoid detection.
Profit Remains a Lure
Despite the risks, the potential for profit remains a lure for some. Leigh Hansson, sanctions partner at law firm Reed Smith, who advises shipping and trading companies on oil sanctions compliance, noted that “operators may still enter the shadow fleet because it can be highly lucrative.” However, only those with little experience of the shipping market may be willing to engage in risky operations, using older vessels that major ship insurers will not cover.
Reporting by Jonathan Saul; editing by Barbara Lewis
Original Article: Shadow tanker fleet grows more slowly as Western sanctions target Russian oil — Reuters