Elisabeth Braw is a senior fellow at the Atlantic Council, the author of the award-winning “Goodbye Globalization” and a regular columnist for POLITICO.
Since Russia’s 2022 invasion of Ukraine, the shadow fleet has bloated.
Comprising vessels operating outside the official world of shipping, the shadow fleet poses a risk to legally operating ships, coastal states and the maritime environment. But it also poses an additional threat to NATO members: Russia could use the massive fleet for strategic sealift.
Even before Western governments imposed a $60-per-barrel price cap on Russian oil in December 2022, Western maritime insurers were rightly guessing such a move would come. As I highlight in a new report on the shadow fleet, these insurers, which dominate shipping’s protection and indemnity (P&I) insurance, had begun withdrawing coverage of tankers carrying Russian oil even before the cap was announced. Then, when it was introduced, they had to end the coverage altogether, since they’re bound by the laws of their home countries.
Western shipping companies were bound by the price cap as well. And most shipping companies located elsewhere stopped transporting sanctioned Russian oil too, as doing so would have meant sailing without proper accident insurance.
All this was meant to reduce Russia’s crucial oil revenues and possibly convince Moscow to end its war against Ukraine. Instead, the oil price cap has ended up causing an explosive growth of the shadow fleet.
These shadow vessels — also known as dark or ghost vessels — are owned by opaque companies, lack functioning P&I insurance and sail under the flags of Gabon and other countries with minimal or no maritime expertise. Until the introduction of the price cap and other sanctions, the shadow fleet consisted of a couple hundred vessels transporting sanctioned goods to and from Iran, Venezuela and North Korea. But suddenly, Russia was extremely dependent on the shadow fleet, which meant lots of officially operating shipowners were suddenly interested in selling aged ships into it.
The armada grew very swiftly. Although dark vessels are by definition difficult to identify, the fleet is now estimated to comprise 17 percent of the global oil tanker fleet, while large numbers of other tankers and cargo vessels are now part of it too.
That means that the owners of more than 1,000 merchant vessels have taken Russia’s side. To be sure, the shadowy owners hiding behind brass-plate companies in tucked-away locations may not politically support the Kremlin, but they’ve seized a business opportunity. And these owners and vessels could very well aid the Kremlin in other ways too. Namely, the Kremlin could use these ships for strategic sealift.
Strategic sealift is one of those indispensable military activities that takes place away from the public eye: Commercial vessels transporting gear needed by armies, from tanks to fuel. And if Russia or its friends decided to launch a new military conflict, they could now tap into the shadow fleet.
“I’m picking up discussions in the industry that point out that even if the sanctions were rescinded today, not all the [shadow fleet] ships would come back to commercial trade,” said Svein Ringbakken, CEO of the Norwegian maritime war-risk insurer DNK. “Some are unsuitable; some are operating in a very low-cost environment.”
Indeed, many shadow vessels are forever lost to the official shipping sector. “These vessels are already unofficially serving Russia and other countries that rely on the shadow fleet,” Ringbakken noted. “The fact that the dark fleet is available to these countries in peacetime means that it can also be available when things become less peaceful.”
This matters not just because Russia may need strategic sealift, but because America’s sealift capabilities are in dire straits. Since the early years of the Cold War, the strategic sealift system has comprised ships and seafarers employed by the Pentagon’s Maritime Sealift Command, as well as ships and seafarers organized by the civilian Maritime Administration and contracted from the private sector. While this system mostly functioned well during that period, it has since fallen on harder times.
Today, 17 of the 44 roll-on/roll-off ships operated by the U.S. Transportation Command, which includes the Maritime Sealift Command, are 50 years or older. The Maritime Administration, meanwhile, currently has 92 ships — down from 2,277 in the 1950s. And yet, at present, more than 90 percent of the U.S. military’s equipment gets to Europe by sea.
America’s shipping sector can’t do much to help either, as it’s small and maxed out. According to the U.N. Conference on Trade and Development, 3,531 merchant vessels (3.4 percent of the world’s total) now sail under the U.S. flag. Russia, for its part, has 2,910 merchant vessels sailing under its flag, but thanks to the shadow fleet, it may have hundreds more at its disposal. To be sure, Gabon and other such nations might not be happy about this, but if they were to deflag their vessels, other countries would simply step in.
America’s first priority in this matter should indisputably be fixing its own strategic sealift — especially since it now has to plan for the prospect of an armed conflict not just with Russia but also with China, which has 5,997 merchant vessels under its flag and 842 under the flag of Hong Kong. (Hint: a few European allies have the capability to help the U.S. when it comes to strategic sealift.) But making sure the shadow fleet doesn’t double up as Russian strategic sealift is almost as important.
Now would be a good time to let the dark vessels’ crews and owners know that while aiding sanctioned Russian trade might seem like a clever idea, supporting the Russian military would be a terrible one.
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