A shadow fleet of 600 oil tankers are shipping Russian crude oil to different parts of the world, undercutting the stern sanctions the West enforced on the trade of Russian oil.
CNN revealed in a report that the number of the shadow fleet is increasing by the day and they already constitute around 10 percent of the total number of oil tankers in service globally currently.
Though the US and and its European allies unleashed a no holds barred sanctions regime against Russia, various reports throughout the last year indicated that the sanctions may have failed in returning the desired goals.
According to figures released by a Finland-based think tank, Russia made $158 billion in energy exports in the six months after the start of the Ukraine war. "Surging fossil fuel prices mean that Russia's current revenue is far above previous years' level, despite the reductions in this year's export volumes," the Centre for Research on Energy and Clean Air (CREA) said in September.
The center-piece of the Western strategy to counter Russia in the aftermath of the Ukraine war was economic sanctions. The United States, UK and the European Union rolled out crippling sanctions against Moscow with surprising speed. The expectation was that the sanctions would destroy Russia's economy, forcing the Kremlin to roll back its ambitious military goals in Ukraine quickly.
Ban on Trading in Sea-Borne Russian Crude
The sanctions met some of their immediate goals. Russian assets abroad were frozen, the country's sovereign ratings dipped and Moscow was forced into a technical default on its bonds. The West's broader strategy revolved around hitting Russia where it hurts the most. The calculations were that an embargo on Russian fossil fuels will cut off funds, pushing the Russian economy into a state of despair and disrepair.
As the war progressed the West targeted Russian oil trade, effectively prohibiting shipping companies from carrying Russian crude by means such as denial of insurance. Towards the end of last year, the ban on European nations receiving sea-borne Russian crude came into effect. This totally threw a large number of shipping companies out of the business.
However, according to the latest reports, vessel owners are back in business by circumventing the sanctions through novel ways. The CNN report says that new players have started taking advantage of the situation, using shell companies in Dubai or Hong Kong. In some cases shippers bought old and creaky vessels from Europe. These dark operators mostly service the oil trips by staying under the radar after switching off the transponders.
According to Kepler, India and China have helped Russia beat the western sanctions by lapping up crude from the country. The data shows that New Delhi and Beijing bought a record amount of crude oil from Russia after the western ban on buying seaborne Russian crude came into effect.