- Growing pool of tankers serving West’s geopolitical rivals.
- Profit-chasing magnates operate ‘state-tolerated’ flexible fleet.
- Old, uninsured tankers threaten marine environments.
Russia, Iran and Venezuela — all under various US and EU sanctions targeting their energy exports — are increasingly sharing the same pool of vessels to maintain their overseas oil sales, aided by an emerging class of shipping companies controlled by shadowy businessmen, some of them with strong ties to the West, reports Platts.
The number of tankers transporting crude and refined products produced by more than one of the sanctioned countries has reached 193, representing a growth of more than fivefold from 35 at the end of last year, according to S&P Global Commodities at Sea and Maritime Intelligence Risk Suite data.
US and EU sanctions target energy exports
Roughly 96% of the ships are operated by new, little-known companies registered in China, Hong Kong, the Seychelles, the UAE or other jurisdictions where legal challenges associated with Western sanctions are limited, the data suggests.
While the three sanctioned countries are all OPEC+ members, share geopolitical interests with their worsening relationships with the West, and have publicly vowed to enhance energy links, observers suggest the entities that have emerged to ship their oil are mainly owned by businessmen who know state-owned oil producers in the countries well, rather than resulting from joint state efforts.
“There’s no formal, treaty-style ‘tri-lateral logistics alliance,’” said Sanam Vakil, director for Middle East and North Africa at think tank Chatham House. “What you’re seeing is … best understood as opportunistic, state-tolerated logistics rather than a standing cartel.”
This group of ships sharing in the sanctioned oil trade has expanded at a faster pace than other shadow fleets established to bypass Western trade restrictions for just one of the countries. Based on the CAS and MIRS figures, the bespoke fleet for shipping Iranian oil has increased by 15 to 170 ships this year, but the Russian fleet has shrunk by 25 to 561 ships and the Venezuelan fleet decreased by 59 to 54 ships.
Elisabeth Braw, a senior fellow with the Atlantic Council, suggested the development of the flexible fleet has come as shippers engaging in sanctioned trades sought to broaden their customer base in their relentless chase for profits.
“People involved in the shadow fleet don’t do it out of any sort of sense of patriotism toward Russia or any other country. It’s a business opportunity,” Braw said. “If you are involved in the shadow fleet, why not service every country that is interested in your services?“
Emerging networks
At least six tankers in the multi-country fleet are linked to Mohammad Hossein Shamkhani, identified by the US, UK and EU as the man behind a large logistics network transporting Russian and Iranian oil.
Shamkhani, the son of Ali Shamkhani, a top adviser to Iran’s Supreme Leader Ayatollah Ali Khamenei, has been shipping Iranian military equipment to Russia in exchange for oil while enabling Iranian petroleum sales with his family’s influence, according to the governments.
Operating an investment firm from London, the Iranian national was able to generate “tens of billions of dollars in profit” and own “exclusive properties around the world” via front companies and ship management firms, the US and UK have alleged.
Western authorities have long targeted Russian, Iranian and Venezuelan state-owned oil and shipping companies in their sanction regimes, but the US in particular is starting to blacklist individuals they deem as involved in illicit trades.
In recent months, the US Office of Foreign Assets Control has sanctioned Salim Ahmed Said after accusing the Iraqi-British national of selling Iranian oil disguised as Iraqi oil, British-French Mathieu Alain Michel Philippe for allegedly shipping Russian oil, and Greek shipbroker Antonios Margaritis for Iranian oil exports.
“We call out the people who are involved in the shadow fleet,” Braw said. “These are, in some cases, people who live in Western countries. The more we call out the actual individuals involved, the more it would disincentivize new players from joining the shadow fleet.”
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Source: Platts
