How Shadow Fleets Circumvent Sanctions: Seized Oil Tankers and Global Oil Trade

The Rise of Shadow Fleets

• 🚢 A shadow fleet of aging oil tankers has emerged to bypass Western sanctions on oil exports from countries like Russia, Iran, and Venezuela.
• 📈 This parallel maritime network has expanded rapidly, with the number of falsely flagged ships more than doubling to over 450 by 2025.

Tactics of Shadow Fleets

• 🕵️ Vessels often have murky ownership structures and frequently change flags to countries unable or unwilling to enforce sanctions.
• 🗺️ Operators falsify registration details, broadcast fake location signals, or switch off tracking systems to avoid detection.
• 🌃 Risky ship-to-ship transfers are frequently carried out under the cover of darkness.

Impact on Global Oil Trade

• ⛽ The shadow fleet has enabled Russia to largely maintain its oil exports despite sanctions.
• 💰 Buyers like India and China benefit from steep discounts, purchasing Russian oil below the Western-imposed $60 per barrel price cap.
• ⚠️ Increased US pressure on these vessels could lead to higher costs for the entire sanctioned fleet, potentially impacting prices and spreading to other sanctioned countries.
• 💸 If costs increase due to US actions, Russia may have to lower its sale prices to clear the market.