Russia’s Shadow Fleet: A Masterclass In Sanctions Evasion – Analysis

By Simone Chiusa

In the wake of Western sanctions surrounding the Ukraine war, Russia developed a network of clandestine oil tankers to ensure the continuity of its energy exports – the so-called “shadow fleet.” This system of tanker ships, through various deceptive practices, has been successful in evading international monitoring and restrictions. The vessels, often registered under flags of convenience, are Moscow’s primary tool for circumventing the oil price cap and maintaining supply to global energy markets. And despite international efforts to counter such activities, the shadow fleet has significantly expanded, becoming a major revenue source for Russia.

In fact, Russia’s shadow fleet has been so successful that similar strategies are sure to arise in the future as other states seek to evade sanctions.

The invasion of Ukraine in February 2022 resulted in unprecedented sanctions from the EU, the G7, and the United States against the Russian Federation. The primary goal of the sanctions was to reduce Moscow’s ability to finance its military operations by targeting its oil and gas sector, which accounts for approximately 60% of Russian exports and about 40% of state revenues. Key measures by the Western powers included:

• A ban on the import of Russian oil by sea;
• A price cap limiting the maximum price of Russian crude oil to $60 per barrel;
• Prohibitions on providing transportation and insurance services for Russian oil sold above the price cap

To circumvent these restrictions, Russia developed an extensive network of clandestine oil tankers. It consists of often obsolete vessels (15-20+ years), registered under flags of convenience, which are used to transport oil and refined products primarily to China, India, and Turkey.

Structure and Composition of the Shadow Fleet

In December 2023, the International Maritime Organization (IMO) adopted a resolution to counter the illicit operations of the Russian shadow fleet. The document urges member states to adopt concrete measures to stop the flow of illicit oil and promote greater transparency in the maritime sector. It argues that vessels in the shadow fleet:

• Operate under safety conditions not conforming to international standards;
• Evade inspections by the flag state and the port of call; and
• Adopt measures to evade detection and conceal their actual identity.

According to data out of the Kyiv School of Economics (KSE), since 2022 Russia has invested about $10 billion in expanding this fleet, which is now believed to number over 400 ships. Since the beginning of the invasion of Ukraine, the volume of Russian oil transported by these tankers has steadily increased, reaching 4.1 million barrels per day in June 2024.

Today, the shadow fleet accounts for 70% of Russian seaborne oil and 89% of crude oil exports (as opposed to oil products). It remains a central pillar in the Kremlin’s push to insulate its oil revenues from the diplomatic blowback of the Ukraine war.

The Kremlin has adopted various strategies to avoid international controls and ensure the operational continuity of its shadow fleet. One of the most common tactics is the registration of oil tankers under the flags of convenience, mainly Panama, Liberia, the Marshall Islands, the Cook Islands, and Gabon. These vessels are not subject to the same regulations applied in countries that adhere to sanctions, allowing them to operate without the risk of seizure or interdiction of ports.

A significant part of the fleet involves tankers that previously belonged to the Russian state-owned company Sovcomflot, which were subsequently transferred to companies based in the United Arab Emirates. The move served to conceal Russian ownership, facilitating their ongoing use in international markets. Such shell companies, often just a desk in a Dubai free-trade zone or an address in the Seychelles, tend to obscure links to the Russian state​.

Another popular tactic is manipulating or hiding ship data: tankers turn off their AIS transponders (Automatic Identification System) and go dark while at sea, making them invisible to satellite and tracking systems. Moreover, there is the ship-to-ship transfer technique, which consists of transferring loads between two ships in open sea, concealing the shipment’s actual origin.

The shadow fleet has evidently been a major success. According to the KSE report, the shadow fleet has allowed Russia to successfully circumvent the price cap system, generating about $9.4 billion in additional revenue in 2024. Since the ships are not directly linked to Moscow, the price cap cannot be applied, allowing the sale of oil at prices above the $60 per barrel limit. Russia’s exporters have been getting around $65 on average for their crude, boosting the Kremlin’s war chest. Despite the sanction regime imposed by EU, US and the G7, in 2024, Moscow’s oil revenues actually increased about 5% from 2023, reaching approximately $16.4 billion.

In light of this ongoing success, on January 10, 2025, the United States, through its Office of Foreign Assets Control(OFAC), imposed new sanctions against Russia to counter price cap evasion. The OFAC expanded the list of sanctioned entities, including several Russian oil companies, such as Gazprom Neft and Surgutneftegas, along with 183 tankers belonging to the shadow fleet.

The EU has also made moves to tighten the sanctions net. On the occasion of the approval of the 16th package of sanctions against Russia since the outbreak of the war, the European Union vowed to intensify its crackdown on the shadow fleet. As part of the new measures, 74 additional vessels were added to the EU sanction list, bringing the total number of sanctioned ships to 153. In parallel, the United Kingdom has also reinforced its sanctions regime, recently adding another 40 ships to its blacklist, bringing the total number to 133.

Environmental Threats Posed by Shadow Fleet

The activities of the Russian shadow fleet also raise serious concerns for maritime safety and environmental security. As reported by CREA, over 72% of the vessels are more than 15 years old, exponentially increasing the risk of malfunctions and oil spills at sea. Additionally, the lack of adequate P&I insurance increases the potential damages from fuel spills. Without adequate insurance coverage, emergency funds to contain spills risk delay or being completely unavailable.

An unfortunate illustration of these risks can be found in the story of the Andromeda Star, a tanker owned by a Seychelles-based company lacking adequate insurance, which in March 2024 collided with another vessel off the coast of Denmark. An environmental disaster was narrowly averted, as the tanker, which could have been carrying up to 700,000 barrels of crude oil, was on its return trip to Russia and therefore was not loaded. More recently, on February 9 2025, an explosion was reported in the tanker Koala in the port of Ust-Luga (Russia). The ship, registered under the flag of Antigua and Barbuda, was carrying 130,000 tonnes of fuel and was preparing to leave the port when several explosions in the engine room caused severe damage to the vessel, forcing the crew to evacuate. The Russian Agency for Maritime and River Transport reports that there were no fuel leaks and that the tanker is not at risk of sinking.

Nevertheless, incidents involving shadow fleet tankers are becoming more frequent, such that an environmental disaster seems only a matter of time.

Shadow Fleet as a Tool of Hybrid Warfare

The Baltic Sea has become a focal point for the operations of the Russian shadow fleet. Approximately 50% of Russian oil exports pass through the region, making it crucial for the Kremlin’s activities. In April 2024 alone, the KSE estimates that the shadow tankers linked to Russia transported about 92 million barrels, equivalent to 82% of all Russian exports through the Baltic Sea.

The shadow fleet is not just a challenge in terms of evading sanctions; it also has consequences for European security. Employing hybrid warfare tactics, vessels from the shadow fleet conduct espionage and sabotageoperations targeting critical submarine cables. One striking case involved the Eagle S, a Cook Islands-flagged tanker operated by a UAE company, which was transporting Russian oil. The ship is suspected of severing the Estlink 2 power cable that links Finland and Estonia. Following its seizure by Finnish police, investigations revealed that the Eagle S was equipped with sophisticated spy devices, designated to monitor naval movements.

Undersea cables, used for transporting gas, electricity, and internet traffic, are extremely valuable and their sabotage can have devastating economic effects and expose Europe to cyberattacks.

In response to these threats, during the Helsinki summit, NATO Secretary General Mark Rutte announced the Baltic Sentry operation. The initiative involves strengthening surveillance in the Baltic Sea by deploying frigates, maritime patrol aircraft, and naval drones. Additionally, during the summit, the leaders of the Baltic states agreed to adopt new surveillance technologies and enhance collaboration with critical infrastructure operators to bolster the protection of submarine resources. To further enhance maritime surveillance, NATO is also deploying advanced Unmanned Surface Vessels (USVs). These vehicles demonstrated their tactical value during the Ukraine war, where they were effectively used as precision strike weapons against the Russian fleet in the Black Sea. USVs can conduct endurance-focused patrols, provide real-time data transmission, and deploy sophisticated sensors for underwater threat detection.

Geopolitical Implications

The shadow fleet has become a significant strategic asset for the Russian state, hobbling Western efforts to reduce Moscow’s energy-derived revenues. Furthermore, through espionage and sabotage activities in the Baltic Sea tied to the shadow fleet, Russia has highlighted ongoing vulnerabilities in critical European infrastructure: underseas cables are central to Europe’s energy and digital security, and any disruptions or damage to them risks profound consequences for the EU’s economy and stability.

Yet the overriding takeaway here is how successful the shadow fleet has been in achieving its initial objective of ensuring the ongoing flow of oil revenues into Russia. This success will reverberate in future geopolitical conflicts, as the West’s inability to block the network of ghost vessels will surely encourage other state and non-state actors to replicate the strategy, thereby eroding the effectiveness of sanctions regimes going forward.

• This article was published at Geopolitical Monitor.com