More than a third of ships used by Russia's "shadow fleet" to skirt around sanctions were previously owned by Western companies, according to a new investigation.
Why It Matters
Western countries have leveled a raft of sanctions against Russia, designed to cut Moscow off from funding for its war against Ukraine, nearly three years into Europe's largest land conflict since World War II.
In early January, the U.S. announced fresh sanctions against "an unprecedented number of oil-carrying vessels, many of which are part of the 'shadow fleet.' These ships ferry Russian oil around the world, disguised as what the U.S. Treasury called "opaque traders."
What To Know
In 2022, G7 nations, or countries with powerful economies, and the European Union implemented a price cap on Russian oil to limit how much Moscow can make from its crude oil exports. The European Union is a "non-enumerated" member of the G7 bloc.
Russian "shadow fleet" has grown to make up roughly 17 percent of the world's total number of oil tankers, The New York Times reported in December.
NATO officials have increasingly sounded alarm bells about the fleet and its suspected role in the sabotage of critical infrastructure like undersea cables in the alliance-dominated Baltic Sea.
Ship-owning companies operating from Western countries have made more than $6 billion by selling oil tankers destined for the scrapheap, which were then used to shift Russian oil supplies around the world, according to a new multinational investigation led by European outlet, Follow the Money.
Roughly 230 old tankers were sold by British, German, Norwegian and, "above all," Greek businesses for "exceptionally high prices," according to the investigation.
The ships were sold to companies registered in countries like India, Vietnam, and the Seychelles, according to the report. These nations aren't party to the sanctions designed to slash Moscow's revenue stream from oil.
Shipowners from 21 out of the 35 countries which have sanctioned trading Russian oil have sold ships destined for the "shadow fleet." The investigation involved newsrooms based in nine countries and used data provided by the Kyiv School of Economics (KSE).
Greek companies sold 127 tankers now in the shadow fleet, making up more than half of the pinpointed sales and translating to just shy of $4 billion.
Two ships sold by Marla Tankers, owned by Greek shipping heir Paris Kassidokostas-Latsis, wound up in the shadow fleet, the investigators said.
Newsweek has reached out to Marla Tankers for comment via email.
British companies profited from the sale of 22 vessels for roughly $590 million, according to the report, while German owners parting with 11 vessels secured $190 million.
Danwatch, a Danish outlet that contributed to the investigation, reported in a separate article on Tuesday that four large Danish shipping companies had sold at least 10 ships between mid-2022 and the beginning of 2023 that had ended up in the shadow fleet.
This came before the European Union put in place a new set of rules, making it the responsibility of companies selling vessels to third-party countries that the ships were not used to circumvent sanctions.
Now, "people selling vessels have to notify, and they have to prove, that they have checked [that] the vessel does not undercut the sanctions or the price cap," David O'Sullivan, the European Union's sanctions envoy, told the investigators.
"We are satisfied that this has created a situation where companies are stopping to reflect and say: 'OK, we have to be a bit more careful here,'" O'Sullivan said. The investigation, however, found that at least 32 tankers that went on to be a part of the shadow fleet had been sold by European owners after the regulation came into force in late 2023.
Who Said What
O'Sullivan told Follow the Money that authorities cannot block sales of vessels to third countries, but reporting the sales is "still an effective way to combat sanctions circumvention."
Michelle Wiese Bockmann, an analyst at shipping journal Lloyd's List, told the investigators: "A lot of European shipowners had old tonnage that they thought wasn't really worth much. All of a sudden it doubled in value—and so they scrambled to sell it and make profits."
What Happens Next
The European Union is putting together a new package of sanctions directed at parts of the shipping sector, the investigation reported, although this is pending approval by the member states.
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