Two years after the outbreak of the Russian-Ukrainian war, and in the face of a torrent of Western sanctions on Moscow related, especially to its oil exports across the sea, Moscow was able to form a fleet of oil tankers belonging to mysterious parties or lacking proper insurance, known as the “Ghost Fleet,” to export oil and circumvent. On the sanctions, according to a report by Agence France-Presse, the information of which was updated on Saturday.
On Friday, Washington included on its blacklist 14 oil tankers used by Russia as part of the United States’ efforts to maintain the ceiling on crude prices that the West imposed on Russia against the backdrop of its war on Ukraine.
The Treasury Department imposed sanctions on the state-run Russian shipping company “Sovcomflot” and indicated that it had given it 45 days to unload oil cargo and other 14 tankers before the decision came into effect, according to an Agence France-Presse report.
What is the “Ghost Fleet”?
The Faculty of Economics in Kiev defines the “ghost fleet” as commercial vessels that are not owned by countries within the G7 coalition or the European Union, and do not use the protection insurance designated for maritime transport, which compensates for damages if they occur without a specific ceiling.
College economist Elena Rybakova says this practice existed “even before the war.”
This type of ship, also called “mysterious fleets,” is used in countries such as Iran and Venezuela, which are subject to US oil sanctions, and even North Korea, according to what the agency quoted from the Atlantic Council researcher, Elizabeth Brow.
Based on statistics from the Lloyd’s List Intelligence service, which collects information about maritime navigation, the number of these ships doubled last year, and they now represent about 10% of oil tankers operating internationally. This equates to about 1,400 ships, according to the Atlantic Council reported last January.
It is often difficult to determine the real owner of the ship, due to the grouping of companies into one company or resorting to intermediary companies, according to the Agence France-Presse report.
Why does Russia use it?
Countries, including the United States and Europe, imposed an oil embargo on Russia, setting a ceiling on Russian crude prices, in addition to a ban on providing services for transporting oil by sea to deprive it of financing its war with Ukraine.
To circumvent these sanctions, Moscow was forced to reduce its dependence on Western maritime services by purchasing tankers and providing its own insurance, according to the Rystad Energy consulting company.
Rybakova estimates that more than 70% of Russian oil transported by sea uses the “stealth fleet.”
“Russia’s sanctions-evasion program is growing larger and more complex thanks to an increasingly expanding mysterious fleet,” Lloyd’s List Intelligence said last December.
In its “Russian Oil Tracking” report issued last January, the Kiev College of Economics estimated that 196 stealth fleet tankers loaded with oil “left Russian ports in December 2023.”
The college said that the most common flags flown by the ships of the “Russian Ghost Fleet” are “the flags of Panama, Liberia and Gabon.”
What are the risks?
Lloyd’s List Intelligence reported last December that “the bulk of this mysterious fleet has not undergone any recent inspections, and the maintenance of its ships is substandard.”
The Faculty of Economics in Kiev repeatedly warns that obsolete ships pose a “huge environmental threat to the European Union,” as old and poorly maintained ships pass off the coasts of a number of European countries.
It indicates that 73% of the ships that transported Russian oil last December were built more than 15 years ago.
None of the ships in the Russian “ghost fleet” has adequate protection and compensation insurance, which is mandatory for commercial vessels, to cover risks resulting from wars, collisions, or environmental damage such as oil spills, according to an Agence France-Presse report.
