A new study shows that Russia has spent more than $10 billion on vessels since 2022 to bypass Western sanctions.
According to a report by the Kyiv School Economics, Russian oil exports via the so-called “shadow fleet” have nearly doubled in the last year, reaching 4.1 millions barrels per day.
A shadow fleet is a group of tankers or other vessels that operate outside Western insurance and certification services, as well as shipping services, to transport oil and evade international sanctions and regulations. These ships are often older and underinsured and allow Russia to continue oil exports despite restrictions. They operate with less transparency and oversight than traditional shipping fleets.
The Kyiv School of Economics Institute (KSE) estimates that crude oil prices were only capped at 2.2 million barrels a day in December 2022. As of June 2024 70% of seaborne Russian oil exports were conducted by shadow fleet vessels, including 89% crude oil and 38% oil product shipments.
The UK, Australia, the G7, and the EU implemented an upper price limit of $60 per barrel in December 2022, to prevent Western companies from transporting or servicing Russian crude oil cargoes. This restriction undermines Russia’s oil trade which heavily relies on Western-owned, insured tankers.
Since early 2022, Moscow has invested over $10 billion in leasing and buying older tankers. These vessels are often uninsured and their ownership is unclear.
Experts call for stricter sanctions to be imposed on the shadow fleet. They warn that an accident involving these old vessels could cause an environmental disaster, leading to an oil spillage in European coastal waters.
The Kyiv School of Economics’ report highlights the increasing importance of Russia’s “shadow fleet” in circumventing Western Sanctions. It suggests that the current measures have not sufficiently curtailed Russian oil revenue as Moscow has adjusted its export strategies.
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