A recent investigation by the Organized Crime and Corruption Reporting Project (OCCRP) and Follow the Money has revealed that European and American shipowners have made a staggering $6.3bn from selling hundreds of ageing tankers to shell companies, which then become part of the shadow fleet. This fleet is used to transport oil for Russia, despite European Union sanctions imposed in 2023.
The report tracked the sale of around 230 ships, which often changed names and flags after being sold, and then started transporting oil for Russia. Notably, Greek shipowners accounted for more than half of the sales that ended up in the shadow fleet. While direct sales of oil tankers to Russian entities are prohibited under EU sanctions, indirect sales to companies from countries not participating in sanctions are not illegal.
The investigation found that at least 32 tankers owned by European companies were sold into the shadow fleet after the sanctions came into effect. This has significant implications, as more than a third of the shadow fleet of tankers transporting Russian oil consists of vessels previously owned by shipowners from Western countries.
The growing shadow fleet poses a significant threat to maritime and environmental security, with over 1,000 vessels hit by sanctions and more than 800 without confirmed insurance. The average age of sanctioned ships is 21 years, eight years older than the global average, increasing the risk of costly environmental catastrophes.
Despite efforts to crack down on the shadow fleet, it continues to grow, with around 10 tankers being added each month. The flag states of San Marino, Guyana, Sierra Leone, Comoro Islands, Guinea Bissau, and Guinea have seen extraordinary fleet growth, with San Marino’s fleet growing by 663% over the past 12 months.
The use of the shadow fleet by Russia poses a significant threat to global security and the environment, and has been condemned by the heads of state or government of Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, and Sweden. The London-headquartered Barbados ship registry has also come under pressure, announcing that it will ask 46 ships to remove the country’s flag due to UK sanctions.
As the shadow fleet continues to grow, it is clear that more needs to be done to address this issue and prevent the exploitation of loopholes in sanctions. The investigation highlights the need for increased transparency and cooperation between authorities to combat the shadow fleet and ensure the integrity of the maritime industry.
Marex Media