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European and US shipowners have capitalised on Russia’s need to circumvent Western sanctions, generating a staggering £4.8 billion through the sale of 230 ageing tankers to Moscow’s “shadow fleet”. The vessels, crucial for Russia’s continued oil exports and war efforts in Ukraine, have been strategically offloaded to buyers in non-sanctioning jurisdictions such as India, Hong Kong, Vietnam, and the Seychelles.
Greek maritime enterprises led the sales campaign, disposing of 127 vessels, whilst British companies contributed 22 tankers to the shadow fleet. German and Norwegian entities followed with 11 and eight vessels respectively. These transactions have proven remarkably profitable, as many vessels destined for scrap yards have instead found lucrative second lives in Russia’s clandestine shipping operations.
The investigation, spearheaded by Dutch outlet Follow the Money and supported by nine international newsrooms, revealed that shipowners from 21 sanctioning nations have participated in these sales. The Kyiv School of Economics estimates this shadow fleet, now approximately 600 vessels strong, manages roughly 70% of Russian oil exports.
The implementation of the G7 and EU oil price cap in late 2022 triggered a dramatic surge in vessel valuations suitable for non-Western registration. Industry analysts note that European shipowners witnessed their ageing fleet values double virtually overnight, prompting a rushed selling spree.
Recent EU regulatory measures aim to curtail these practices, requiring companies to verify vessels won’t be used for sanctions evasion. Despite these efforts, 32 European-owned tankers have entered the shadow fleet since the regulations’ introduction. The EU has subsequently banned individual tankers from its ports if found transporting Russian oil or engaging in hazardous shipping practices.
The absence of specific legislation prohibiting shadow fleet sales persists, largely due to resistance from member states with substantial maritime sectors, including Greece, Cyprus, and Malta. This regulatory gap continues to facilitate Russia’s ability to maintain its oil export operations despite international sanctions.
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