Shadow Fleet in Russia-Ukraine War

The term ‘shadow fleet’ has emerged in discussions about the Russia-Ukraine conflict. It refers to tanker ships transporting Russian crude oil to various countries, often in contravention of sanctions. Western media has implicated India as a hub for this shadow fleet, suggesting it is facilitating the laundering of Russian oil

Dismantling Sanctions and Global Shipping Functional Setup

• Sanctions: These are the actions taken by countries to limit trade (by refusing to sell goods and services) and financial operations (including freezing assets in banks and eliminating economic relations).
• The United States placed sanctions on Russia, especially regarding its oil exports – which included a price cap.
• The Greek owners remain the world leader in terms of fleet size (20% of global ship transportation).
• In terms the state which registers ships and vessels, then boats sometimes simply change flags to escape sanctions.
• P&I coverage is vital to ship operations, but sanctions breaches can result in forfeiture of cover.
• Use of shell companies to hide ownership of the vessels, making it challenging to find out who owns them.
• Many ships are flagged to countries with poor compliance to international standards.
• A number of Russian vessels entered into partnerships with Indian businesses and moved to Dubai after the sanctions went in effect.
• The complexities of the shipping industry, as well as the economic consequences that would result from diligent sanctions enforcement.
• The U.K. with only the most limited of action against those companies that in its view,are breaking either its price cap on Russian oil or new regulations on services and insurance to vessels goes to show how regulatory concern shrinks into background noise when an economy is involved.