The Kremlin has resorted to using old and poorly maintained tankers to sell crude oil at prices exceeding the Western-imposed cap. This shadow fleet operates under the radar, relying on deceptive practices to evade sanctions and maintain a critical revenue stream for financing the war in Ukraine. The EU responded on Wednesday by introducing new sanctions to disrupt these operations. The move is part of the EU’s continued effort to weaken Russia’s war economy and enforce international restrictions.
The shadow fleet primarily consists of uninsured ships, many over 20 years old, operating under “flags of convenience” from nations like Panama and Liberia. These vessels use tactics such as falsifying records, switching off tracking systems, and conducting ship-to-ship transfers to hide the origin of their cargo. Their deteriorating condition has raised fears of an environmental catastrophe near European waters, with Brussels particularly concerned about the lack of insurance to cover potential oil spills.
Expanded Sanctions to Curb Oil Revenue
In addition to targeting the shadow fleet, the EU has blacklisted Chinese companies suspected of supporting Russia’s drone production. The latest sanctions package, the 15th since the invasion of Ukraine in February 2022, includes 50 vessels from the shadow fleet. These ships are now barred from accessing EU ports and services, expanding on the previous package that sanctioned 27 vessels.
This package, sealed by EU ambassadors during a meeting on Wednesday, faced limited resistance, despite Hungary’s presidency of the Council of the EU raising initial concerns. Ursula von der Leyen, president of the European Commission, emphasized the EU’s commitment to sustaining pressure on the Kremlin. The sanctions aim to address Moscow’s reliance on oil exports, which generated €475 billion between February 2022 and June 2024—68% of its total fossil fuel revenue.
China and India remain major buyers of Russian oil, often refining it and re-exporting it under different labels to the EU. The shadow fleet, estimated at around 600 vessels, continues to play a central role in enabling these transactions. However, the lack of transparency regarding ownership and operations complicates efforts to enforce sanctions effectively.
Brussels remains deeply concerned about the environmental risks posed by the shadow fleet. The poor maintenance of these vessels and their use of fraudulent documentation could lead to catastrophic oil spills in or near European waters. By expanding sanctions and increasing oversight, the EU hopes to mitigate these risks and disrupt Russia’s ability to sustain its war economy.