From early in Russia’s war with Ukraine, the West hit Russia with economic penalties aimed at strangling its profits from oil sales. As Europe announces its 19th round of sanctions, an uncomfortable reality has sunk in.
Russia quickly found a workaround to profit from oil in spite of a price cap and import restrictions. By building up a huge fleet of dilapidated ships with hazy ownership that covertly shuttle its fuel to far-flung markets, it has managed to evade the sanctions and make money.
Now, it is becoming increasingly clear that the vast expansion of this shadow fleet comes with serious and potentially long-lasting effects. The rickety ships pose dire risks to the environment, and the trend has created a huge illicit shipping economy that some experts worry could outlast the war. That could pave the way for nations to continue skirting the existing order, with nations including Russia and Iran as shippers, and China and India as customers.
“A lot of people want to do the easy part — impose sanctions — but we’ve actually caused a bigger problem,” said Ian Ralby, an expert in maritime security and founder of the research firm I.R. Consilium. “The sanctions don’t put them out of business. They put them out of legitimate business.”
The shadow fleet accounts for about 17 percent of all in-service oil tankers sailing the ocean today, according to S&P Global Market Intelligence, a research firm. There were 940 ships in the fleet as of earlier this year, up 45 percent from a year ago, based on the firm’s estimates.
While there were some boats with dubious ownership and shipping practices in operation before Russia’s full-scale invasion of Ukraine in February 2022, they became far more common after the start of the conflict.
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