The British government recently announced sanctions on an additional 11 oil tankers associated with Russia in a move to effectively curb the oil transportation capabilities of the “Shadow Fleet”. The UK government is leading efforts to increase pressure in collaboration with European countries to tackle the issue head-on.
According to reports from the British Financial Times, it was only in May this year that the UK government gained the authority to sanction vessels themselves rather than ship owners or operators. Last month, the UK imposed sanctions on four oil tankers linked to Russia in an initial attempt to target individual vessels in the Russian Shadow Fleet. The EU has also enforced sanctions on 17 vessels connected to Russia.
In a press release issued by the UK government on Thursday, Prime Minister Keir Starmer is set to meet with Ukrainian President Zelensky on Friday morning to discuss further measures to curb Putin’s war machine in the coming months.
During the European Political Community (EPC) summit held on Thursday, led by the UK, 44 European countries along with the EU agreed to work collectively to dismantle Russia’s “Shadow Fleet” that has been evading international sanctions.
The Russian “Shadow Fleet” consists of approximately 600 vessels, accounting for about 10% of the global Wet Cargo Ship fleet. It transports around 1.7 million barrels of oil per day, providing substantial funds to Russia’s war machinery.
Some of these vessels also serve as surveillance platforms for Russia, while others are suspected of transporting weapons and equipment. The key issue with these vessels is their opaque ownership structures or lack of proper insurance, making them difficult to track or enforce compliance with Western laws.
The US has already imposed sanctions on 42 oil tankers associated with Russia, primarily in January and February this year. Analysis by the Financial Times indicates that the volume of Russian oil carried by these vessels has dropped from nearly 9 million barrels in November to 1 million barrels in June.
Last week, reports from The New York Times cited insider sources suggesting that US Treasury officials proposed new actions to further weaken Russia’s capacity to wage war by targeting the “Shadow Fleet”. However, concerns within the White House about potential impacts on energy prices ahead of the November elections led to the freezing of this proposal.
Sources mention that proposed penalties against the Russian “Shadow Fleet” are still under review and will not be immediately implemented.
In December 2022, the UK, along with the G7, Australia, and the EU, set a price cap of $60 per barrel for Russian oil exports and prohibited Western companies from providing insurance, financing, or transportation for Russian oil, aiming to constrain Russia’s oil trade revenue.
Starting from October 2023, the US, UK, and Europe intensified sanctions against Russia by targeting vessels carrying Russian oil priced above the set cap.
However, as time passed, Russia, being the second-largest crude oil exporter globally, began investing billions of dollars in acquiring hundreds of old vessels, forming its own fleet – the “Shadow Fleet” or “Ghost Fleet”, rendering Western sanctions less effective.
Now, Western countries have found a new tactic to undermine Russia’s oil transportation. This strategy focuses on individually targeting oil tankers, which has proven to be more effective in curtailing Russia’s oil transport capabilities compared to previous measures aimed at assisting Moscow in evading sanctions.
As reported by Bloomberg on July 10, in recent months, over fifty Russian crude oil tankers that faced sanctions from the US, UK, and the EU are currently anchored and idle in the Baltic Sea, Black Sea, Russian Far East waters, China, North Korea’s coast, and near the Suez Canal.
The report mentions that since October 2023, nearly all of the 53 sanctioned vessels have not received any cargo. A few vessels that have transported goods attempted to conceal their movements by shutting down automatic tracking systems and transferring goods clandestinely from one ship to another.