The Curse of The Black Pearl: Who Transports Russia's Bloody Oil and Why

In the media of many countries, the ideas are rapidly spreading that there is such a thing as a "shadow fleet" of tankers that transport Russian oil, disregarding both sanctions and the so-called "price ceiling" (price cap). However, the problem is more complex than that, as just a small circle of states consciously supports sanctions.

Naturally, in the minds of readers and even in some authors who disseminate information about the role of the so-called "shadow" tanker fleet, "romantic" associations arise from pirate books for youth. Some imagine very old, rusty tankers with fake flags, unregistered, which transport Russian oil and petroleum products from Russian ports in the dark of night, fundamentally not turning on the transmitters of the Automated Information System (AIS).

But it doesn't happen like that at all. There are fresh tankers, financed by major banks and with fairly reputable insurers involved. So why does reality differ so much from myths and rumors?

Workarounds for Sanctions

In fact - and this is no secret to experts - when we read about something like a "shadow fleet", we are dealing with either blatant unprofessionalism or some form of "cover-up information operation". Because there is no such thing as a "shadow fleet"; it does not and has never existed.

There is a legitimate global fleet of tankers transporting Russian oil and petroleum products for export. For example, in April 2024, more than 500 tankers transported such cargoes from Russian ports on the Black and Baltic Seas. And over the past 2 years, more than 2000 such shipments were made. For those involved in daily monitoring of tanker movements, like myself, this is no secret.

In March 2024, 36 tankers transported crude oil from Russian ports on the Black Sea, carrying 4.3 million tonnes (with each tanker's deadweight ranging from 100,000 to 160,000 tonnes). The destinations in March 2024 were as follows: 15 to ports in India; 5 to ports in Turkey; 5 to ports in Singapore; 5 to EU countries (in violation of the embargo); 3 to ports in China; 1 to Saudi Arabia; 1 to Tunisia; and 1 to Egypt.

Now, the breakdown by countries of tanker owners' registration:

• Nine tankers are registered to owners in China (25%);
• Seven tankers - Greece (19.4%);
• Five tankers - UAE (13.9%) (including companies possibly owned by Russia in the UAE);
• Five tankers - Marshall Islands - 13.9% (offshore);
• Four tankers - Turkey - 11%;
• Two tankers - India - 5.6%;
• Two tankers - Indonesia - 5.6%;
• One tanker - Vietnam - 2.8%;
• One tanker - Liberia - 2.8% (offshore).

So, only 6 tankers out of 36 can be attributed to offshore companies (where ownership is hidden from the public but not from regulatory authorities) - only 16.7%.

For the rest of the tankers, there is updated detailed data on the name, identification number, and address of the shipowner and operator in open and specialized directories. For example, here is detailed information:

Registered owner LAVENDER MARINE LTD Care of Thenamaris (Ships Management) Inc, 16, Athinas Avenue & Vorreou Street, Vouliagmeni, 166 71 Athens, Greece. Since 07/02/2018.

All these vessels are in all registries, operate with AIS (Automated Information Systems). Occasionally, AIS may be turned off in Russian ports, but not always. So, they can be tracked - if there is a desire.

Most of these tankers are of decent age and technical condition (otherwise Turkey would not allow them into the straits and the Sea of Marmara, as they take this seriously, remembering the super tanker accident in the Sea of Marmara in 1979).

So, the problem lies not in the so-called "shadow fleet", but in the fact that half of the world - mainly from the Global South (Asia, Africa, Latin America) - has not joined the sanctions against Russia.

Plus, in these countries, there are completely absent any systems of independent control over the value of contracts for the purchased oil cargo they transport.

Another important aspect: the so-called "price ceiling" of $60 per barrel, which many still do not adhere to, applies to vessels owned by countries that have joined the sanctions. In this case, it applies to tankers owned by Greece. Thus, as stated above, only about 1/5 of the tankers are affected by this restriction. For the rest of the shipowners, this restriction does not apply at all.

This Is When the Dam Broke 

Indeed, there have been detective stories where ships are transferred to dummy companies in other countries, change names/flags, but they still remain in the registries. Each ship is given a unique registration number by the International Maritime Organization - IMO during its "birth". This number remains unchanged until the ship's "death" and is never transferred to another ship. And the entire history of the ship - changes in names, flags, shipowners - can be seen in professional registries.

And even when ships turn off their AIS transmitters to complicate automated systems' tracking of their presence in Russian ports, they can still be seen because there are places where it is impossible to navigate with the AIS transmitter turned off - these are maritime straits.

So, the "shadow fleet" is actually the fleet of most countries in the world that have not joined anti-Russian sanctions and quietly, formally "not violating anything", transport Russian oil, thus prolonging Russia's ability to kill Ukrainians.

Unfortunately, in the list above, there is still (only) one EU country - Greece, where billionaire shipowners have not yet realized this because billions interfere. But with the joint efforts of diplomats and civil society, this will be pushed.

But what to do with the other half of the world is a broader question than just the export of Russian oil.

IPhoto: India imports colossal volumes of Russian oil, while the produced oil products may already not fall under the price cap. Source: Getty Images

What Can Be Done About It

The so-called "price cap" - a price ceiling on oil and oil products exported by Russia by sea - has turned out to be somewhat detached from reality, as one might have expected.

It seems that the ideologists of the price cap did not understand a simple thing: that in the case of using thousands of tankers for transporting Russian oil and oil products, owned or insured by companies from countries that have imposed embargoes, it is not a problem for Russian exporters to provide any counterfeit documents and contracts for control regarding compliance with the oil price restrictions.

Because Russia is a country with a huge historical experience of document forgery, the use of dummy companies, and other shadow schemes. The question is which institution and with what forces can organise such global control?

And in countries that have not joined the anti-Russian sanctions, in principle, no one will demand any similar documents. Because they do not need them.

There is also a suggestion that the so-called "price cap" was just a media technology from the very beginning, the purpose of which was to create only the appearance of certain activity.

Perhaps the sharpness of the problem has increased now precisely because hundreds of tankers - the figure of 800 was mentioned in the media - to avoid bureaucratic hassle with demands from Russian sellers and the provision of European insurance companies with copies of contracts with the oil price corresponding to the "price cap", simply decided to change insurance companies.

So, is there in principle such a "design" of sanctions against Russian oil that would allow significantly reducing Russia's revenues from oil and oil product exports?

The relevance of this question is important for the following reason. In the years 2013-2021, when Russian statistics could still be considered more or less adequate, Russia received more than half of its export revenues from energy exports - on average 60%, and in some years - up to 68%.

In turn, on average, 75% of revenues from energy exports are provided by the export of oil and oil products, not natural gas (its share averaged up to 20%, i.e., three times less than oil).

In the years 2022-2024, despite the EU and G7 embargoes, the maritime export of Russian crude oil has shown a steady upward trend, estimated at plus 9-10% per year in tonnes. The export of oil products during this period grew even faster - at a rate of up to plus 20% per year in tonnes.

Considering the current prices of oil and oil products and the huge amount of investigations, it can be considered that Russia not only did not suffer financial losses from the introduction of the EU-G7 embargo and the price cap but even managed to compensate for the losses from the export of natural gas and arms exports by increasing oil prices and redirecting its export markets.

The main reason for this is that the designers of oil sanctions were more afraid of rising oil prices in their countries than they wanted to achieve a reduction in Russia's oil revenues.

Therefore, the only systemic way out of this situation lies in the economic isolation of the aggressor country. This can be done in two ways.

The first way is to impose US and European sanctions on all tankers transporting Russian oil and oil products - this will put shipowners at risk of a huge reduction in the world area of operation of their vessels.

The second way is to declare that all banks servicing operations with the import of Russian oil and oil products risk being cut off from operations with US dollars and euros.

By the way, both the first and second ways do not threaten an increase in oil and oil product prices. Unlike the revenues of the petrol station country.