Shadow Fleet Expands as Sanctions Fail to Halt Oil Trade

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  • Iran and Russia Expand Sanctions-Busting Fleet.
  • Shadow Ships Use GPS Spoofing and Fake Papers.
  • Experts Warn of Impending Maritime Disaster.

The shadow fleet—a collection of tanker ships operated by countries under sanctions, like Iran and Russia, to sell oil on the global market- is on the rise. According to a report from Allianz, these ships now account for approximately 17% of all international tankers, reports Marketplace.

Iran’s Sanctions Workaround

The concept of the shadow fleet emerged in the early 2010s, following the imposition of Western sanctions on Iran’s energy exports. “It really began as a way for Iran to export and import because it was under so many sanctions,” said Elisabeth Braw, a senior fellow at the Atlantic Council.

Russia Joins In Post-Ukraine Invasion

After Russia was hit with sanctions for its 2022 invasion of Ukraine, it began using similar tactics. Since then, the shadow fleet has more than doubled in size. “They’re essentially like a tumor on the global shipping system,” Braw said.

Deceptive Tactics and Legal Gray Areas

Shadow vessels often resort to sneaky tactics like GPS spoofing to hide their actual locations, pretending to be in Iraq while they’re loading oil in Iran. They also use fake insurance documents and complicated ship-to-ship cargo transfers to throw off satellite surveillance.

Old Ships, High Risk

Many of these vessels are outdated and poorly maintained. “They’re often old,” said Braw. “They should really be scrapped. An old vessel that is poorly maintained poses significant risks of accidents and incidents, just like an old car.”

There have already been minor collisions and oil spills, and experts fear a major disaster is looming. “It’s a massive accident waiting to happen,” said Tomer Raanan, a maritime risk analyst at Lloyd’s List Intelligence.

Who Pays When Things Go Wrong?

Because these ships are either underinsured or not insured at all, cleanup costs following a disaster won’t be covered by the operators. “All of those costs are gonna fall on the international community and most likely, quite heavily off the coast of whatever country that accident actually happens on,” said Joshua Tallis with the Centre for Naval Analyses.

Sanctions Under Scrutiny

Experts are questioning whether the sanctions regime has achieved its goals. “No amount of sanctions have put Russia, Iran, North Korea, or anyone out of business,” said Ian Ralby, CEO of maritime consultancy I.R. Consilium.

Intercepting Ships Not a Viable Option

Stopping these ships isn’t easy due to international maritime law and political sensitivity. “Most Navy’s coast guards and marine police forces around the world are not gonna have an impetus to try to take on this kind of situation,” Ralby said, “particularly given the extreme political blowback that would accompany any kind of interdiction.”

For now, the shadow fleet continues to sail.

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Source: Marketplace