The capacity of the Russian shadow fleet of oil tankers increased by 70% over the year: in June 2024, the volume of transported oil reached 4.1 million barrels per day compared to 2.4 million barrels in June 2023, according to a report published by the Kyiv School of Economics (KSE).
This trend is observed against the backdrop of the US, Canada, Japan, and European allies increasingly targeting global insurers and shipowners, trying to limit Moscow's ability to earn income from the war in Ukraine. They also added companies and individual ships associated with the Russian shadow fleet to the sanctions list. “The sanctions against tankers were quite effective, but the campaign to add them to the sanctions lists was too limited to really curb Russia's shadow fleet,” said Benjamin Hilgenstock, one of the authors of the KSE report.
In June 2024, 89% of all crude oil shipments from Russia and 38% of oil product shipments were carried out with the help of the shadow fleet. In most cases, crude oil deliveries were made at a price above $60 per barrel, that is, above the price cap set by the G7 countries.
As reported by the Financial Times, referring to the report, by assembling the shadow fleet, Moscow severed ties with the price cap coalition countries, which forced global insurance companies to comply with the sanctions regime. This raised serious concerns about the quality, reliability, and scope of insurance coverage. The combination of the age of tankers — averaging 18 years — and the lack of adequate insurance makes these ships extremely dangerous. The authors of the KSE report claim that in the event of problems, European states may face cleanup costs amounting to billions of euros. Several ships of the shadow fleet have already been involved in oil spills, with some fleeing the scene after causing environmental damage.
Last week, Bloomberg reported that at least 21 of the 72 tankers sanctioned by the US Department of the Treasury's Office of Foreign Assets Control, the UK Treasury, or the European Union in 2023 are once again transporting Russian oil, and the pace of shipments is only increasing.
Photo: AP