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Russia’s Shadow Fleet: How Western Shipowners Fuel Sanctions Evasion

To maintain its lucrative oil exports amid international sanctions, Russia has turned to an aging fleet of tankers acquired through opaque transactions. These vessels, many of them over two decades old, are often purchased through intermediary shell companies, makinTo maintain its lucrative oil exports amid international sanctions, Russia has turned to an aging fleet of tankers acquired through opaque transactions. These vessels, many of them over two decades old, are often purchased through intermediary shell companies, making it difficult to track their final ownership. A new investigation by Follow the Money and OCCRP reveals that Western shipowners have pocketed at least $6.3 billion from selling hundreds of old tankers that ultimately joined Russia’s shadow fleet. These transactions allow Russia to sustain its oil trade despite sanctions aimed at crippling its economy. The tankers, many of which are uninsured or operate under flags of convenience, help Russia navigate restrictions and continue supplying crude oil to global markets, further undermining Western sanctions.

The practice of selling aging tankers to unknown buyers has been ongoing for years, but the scale has surged since sanctions tightened following Russia’s invasion of Ukraine. Analysts estimate that while some ships are legitimately sold to independent entities, many of them find their way to Russian operators, who manipulate ownership records and re-register vessels under flags that allow them to evade scrutiny.

These transactions are made easier by a network of brokers and intermediaries who facilitate the sales, often in financial hubs such as Dubai or Hong Kong. In some cases, shipowners deliberately sell vessels to companies in countries where regulatory oversight is weak, ensuring that Russian-linked buyers can later acquire them with minimal interference.

The shadow fleet consists of roughly 600 tankers that help Russia continue its oil exports despite international restrictions. These ships operate under obscure ownership structures, often registered in jurisdictions that are not part of the sanctions effort, allowing them to evade scrutiny. According to the KSE Institute at the Kyiv School of Economics, nearly 40 percent of these vessels—about 230 tankers—were previously owned by U.S. and European companies.

These tankers typically lack Western insurance and do not comply with standard safety measures, increasing both financial and environmental risks. Despite the intention behind Western sanctions, the sale of these aging ships has provided Russia with a crucial workaround to maintain its oil revenues.

Additionally, the shadow fleet is evolving to become more efficient at evading detection. Some ships have taken steps to obscure their routes by disabling tracking systems or using ship-to-ship transfers to hide the origin of the oil. These tactics make it even more difficult for regulators to enforce sanctions and ensure that Russian oil exports are effectively restricted.

Western Shipowners and the Sanctions Loophole

Direct sales of oil tankers to Russian companies are banned under EU sanctions introduced in 2023. However, there is no prohibition on selling these ships to firms based in non-sanctioning countries. As a result, Russian-linked entities acquire vessels through intermediaries, often registering them in nations such as India, Vietnam, Hong Kong, or the Seychelles before they officially join the shadow fleet.

“You can resell the tanker three times in three weeks,” said Benjamin Hilgenstock, senior economist at the KSE Institute. “The companies that sell tankers know what they have to do to avoid trouble.”

One striking example is the Greek oil tanker Aris, which stopped signaling its location in 2023. Weeks later, it resurfaced under a new name—Canis Power—operating under the Cook Islands flag. The vessel was later found to be transporting Russian oil, a clear illustration of how easily ships can be repurposed to bypass sanctions.

Greek-Owned Tankers Leading the Sales

Greek-operated companies are at the center of these transactions, with more than half of the identified shadow fleet tankers originating from 54 Greek firms. These companies collectively earned at least $3.7 billion from selling old vessels that ultimately facilitated Russian oil shipments.

Marla Tankers, for example, sold two 15-year-old oil tankers in 2024 for $84 million, while Toro Corp resold six aging tankers for $195.4 million in 2023 and early 2024. Many of these vessels were later sanctioned by the U.K. after they were caught transporting Russian oil.

Despite these sales being technically legal, EU regulators have expressed concerns. “People selling vessels have to notify and prove that they have checked the vessel does not undercut the sanctions,” said David O’Sullivan, the EU’s International Special Envoy for the Implementation of EU Sanctions. Yet, the current system lacks robust enforcement mechanisms to prevent circumvention.

The Greek government has defended its shipping industry, arguing that their companies comply with all existing regulations. However, international analysts have pointed out that the sheer volume of tankers transitioning from Greek firms to shadow fleet operators suggests that these companies are exploiting legal gray areas to continue profiting from Russian oil transport.

The Environmental and Security Risks of Russia’s Shadow Fleet

Beyond the financial implications, the shadow fleet poses severe environmental and security risks. Many of the tankers in this network are well past their prime, often lacking proper maintenance and insurance. As a result, they present a higher risk of oil spills and maritime accidents, particularly in critical shipping routes such as the Baltic Sea and the Singapore Strait.

Moreover, intelligence reports indicate that some of these vessels are engaged in covert surveillance activities for Russia, raising national security concerns for NATO and other Western allies.

Ship safety experts have also raised alarms about the increasing risk of catastrophic failures at sea. Older ships that lack proper inspections are far more susceptible to structural damage, which could lead to oil spills that have devastating environmental consequences. The risk of an unmonitored spill in a heavily trafficked region like the Bosporus Strait or the Persian Gulf is particularly alarming.

The Future of Sanctions Enforcement

In response to growing concerns, the U.S., U.K., and EU have sanctioned approximately 300 shadow fleet vessels, with the U.S. taking the most aggressive stance by targeting 155 tankers in January 2025. However, enforcement remains inconsistent, partly due to resistance from EU member states that rely heavily on the shipping industry.

Greece, Cyprus, and Malta, which have strong maritime economies, have pushed back against stricter enforcement measures. Cyprus, for example, has demanded financial compensation for potential losses incurred due to tougher sanctions enforcement.

“Revenue loss due to stricter sanctions enforcement is no trivial matter,” said Petras Katinas, an energy analyst at the Centre for Research on Energy and Clean Air (CREA). “Still, these nations must consider the EU’s collective security goals.”

Conclusion

The shadow fleet has played a crucial role in sustaining Russia’s oil revenues, effectively weakening Western sanctions aimed at curbing the country’s war funding. While the EU, U.S., and U.K. have ramped up efforts to sanction individual vessels, gaps in enforcement and resistance from maritime nations continue to hinder the effectiveness of these measures.

Without tighter regulations and enhanced monitoring of secondary sales, Russia will continue to exploit these loopholes to sustain its oil exports. The challenge for Western policymakers is to strike a balance between economic interests and the strategic necessity of cutting off Russia’s financial lifelines.

Russia’s Shadow Fleet: How Western Shipowners Fuel Sanctions Evasion

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The Rise of Russia’s Shadow Fleet