The United Kingdom and the European Union have escalated their efforts to disrupt Russia’s “shadow oil fleet” by imposing sanctions on a UAE-based company that manages the shipping registries for Gabon and Comoros. These flags have become notorious for their widespread use by vessels circumventing international sanctions on Russian oil.
Targeting the Shadow Fleet’s Infrastructure
The sanctions against the company announced last Friday as part of broader packages, represent a direct move by Western powers to target the operational infrastructure enabling Russia’s illicit oil trade. EU investigators have identified the company from Dubai, with its Comoros registry managed by an affiliated office in Mumbai.
Since Russia’s 2022 invasion of Ukraine, Gabon’s registry has seen a dramatic surge in popularity, largely absorbing tankers that were dropped by more cautious flags. This includes a significant portion of fleet, the sanctioned Russian state-owned shipping company. By 2024, Gabon had become the fastest-growing ship registry globally, predominantly due to its role in facilitating Russian oil transport.
Both the Gabonese and Comoros registries have consistently raised concerns among international authorities due to their association with unsafe maritime practices and sanctions evasion:
- Comoros, in particular, is blacklisted by the Paris Memorandum of Understanding (MOU), red-flagged by the U.S. Coast Guard, and frequently linked to cases of abandoned crews, according to the International Transport Workers’ Federation.
- Both flags are often cited in sanctions advisories involving unauthorized trade with Venezuela, Iran, and Russia. A notable instance is the tanker Pablo, which was flying the Gabonese flag when it exploded off Malaysia’s coast in 2023.
Lowering the Price Cap and Transatlantic Rift
In tandem with the sanctions, the UK has aligned with the EU’s decision to lower the price cap on Russian crude oil from $60 to $47.60 per barrel. This measure aims to further restrict Russia’s oil revenues. The new EU price cap mechanism is dynamic, designed to remain 15% below average international oil prices and will be revised every six months.
However, the effectiveness of this lowered price cap is uncertain, primarily due to the lack of support from the United States. The majority of global oil trades are conducted in U.S. dollars, granting the U.S. significant leverage in enforcing sanctions. The U.S. has yet to adopt the EU’s floating cap approach, widening a rift among Western allies on the best strategy for enforcing oil-related sanctions.
Without U.S. backing and its critical financial power, many experts are skeptical that these latest measures, including the lowered price cap, will significantly impact the earnings of Russia’s shadow fleet. This suggests that while the sanctions on registry operators are a step towards disrupting the fleet’s operations, the broader effectiveness of price caps remains challenged by differing enforcement strategies among key international players.
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Source: Maritime Bell
