Where is Russia Today?

Despite Western sanctions Russia's illicit oil trade continues to thrive with the Shadow Fleet playing a crucial role in evading the price cap. Sanctions imposed in December 2022 by G7 countries on Russia's oil trade intend to prevent Russia from earning money to fund its illegal war in Ukraine however Western governments report that Russia is operating a dark fleet made up of hundreds of old tankers whose ownership is deliberately obfuscated.

The Kyiv School of Economics estimated that the Shadow Fleet comprises over 400 ships capable of transporting oil allowing Russia to evade the sanctions which cap the price of a barrel at $60, limiting Russia's ability to generate money. The aging tankers are bought by non-transparent entities in countries outside the G7 such as the Marshall Islands or the United Arab Emirates and sail under the flag of countries like the Cook Islands or Gabon. Despite being named 'Shadow Fleet' the ships overtly stop at Russian oil terminals, clearly displaying their activity. Some of the vessels can be linked to Russia as with the ships owned by Sovcomflot. The Shadow Fleet's ability to operate with relative impunity has significant implications for the effectiveness of Western sanctions.

Sanctions

The cap on oil prices means that companies cannot buy oil priced above the threshold and insurers cannot provide cover for ships involved in these practices. By capping the price of oil, it can still be provided to countries but Russia cannot make large profits on it, avoiding a gasoline crisis that would increase prices globally. The UN International Maritime Organization requires ships to have insurance and audits to ensure their safety. The Kyiv School of Economics reports that before the sanctions most ships were insured by International Group but since the sanctions the number of ships transporting Russian oil and insured by IG has decreased by 60%. To evade this, non-transparent entities in countries that don't adhere to sanctions such as UAE, India, the Seychelles, buy old tankers and insure them through non-Western or Russian insurance companies.

Western countries have sanctioned 270 ships operating in the Shadow Fleet and 183 more vessels have been added to the sanctions list in the last month. It is reported that approximately two-thirds of the ships have become idle, unable to operate which is costing large amounts of money for the entity that owns it ultimately meaning less money for Russia to fund its illegal war.

Environmental Damage

A tanker carrying over 300,000 barrels of oil from the port of Vysotsk nearly ran aground in the Danish Straits in 2023. Aged 18 years the vessel posed a significant environmental risk as its advanced age made it more susceptible to accidents, potentially leading to severe ecological damage had it run aground. The clean-up would be costly, and due to the sanctions surrounding insurance of these vessels, it is unknown whether the ship's cover would be able to finance the cost. Many European countries now request insurance details from suspected Shadow Fleet ships which can be added to sanctions lists if they do not have correct insurance.

The recent disaster involving Volgoneft 212 and Volgoneft 239 on December 16 2024 further highlights the danger of these aging ships. During a heavy storm Volgoneft 212 split in half and Volgoneft 239 ran aground causing oil to spill in the Kerch Strait, which could be one of the worst ecological disasters the region has seen in years. The ships are over 50 years old and it is clear that they are not maintained to safety standards. As a result, dead birds were filmed on the beaches nearby. Russia's continued operation of aging and damaged ships highlights the country's disregard for environmental protection. Russia's prioritization of oil profits to fund its ongoing conflict, is coming at the expense of both human well-being and the well-being of the environment. This raises questions about the long-term consequences of Russia's actions and the potential for devastating ecological damage.

By operating these aging, damaged ships, Russia continues to carelessly destroy the environment, thinking only about its oil profits to fund its illegal war and not about the well-being of people or the environment.

Sabotage

On December 25 2024 an undersea power cable and 4 data cables were severed, disrupting the supply of electricity from Estonia to Finland. Finnish police seized an oil tanker registered in the Cook Islands suspected of being part of the Shadow Fleet. It is reported that Eagle S dragged its anchor along the seabed to damage the Estlink 2 cable that supplies electricity to Estonia from Finland. It was only just stopped by Finnish defense forces before it would have hit further critical connections.

The damage to the Estlink 2 cable is the second time vital undersea cables between NATO allies have been damaged in 2 months. In November China-flagged bulk carrier Yi Peng 3 dragged anchor to damage the C-Lion 1 communication cable connecting Finland and Germany. The ship spent over 4 weeks in international waters in the Danish Straits as officials investigated.

This has triggered the Joint Expeditionary Force (JEF), a group of 10 European countries to launch an operation dubbed 'Northern Warden', to begin real-time monitoring and warning dissemination to JEF and NATO countries and allies about possible threats to ensure the safety of undersea infrastructure.

The Shadow Fleet's involvement in such activities underscores the need for increased vigilance and cooperation among Western countries to counter Russia's illicit activities. The Shadow Fleet's sabotage incidents have significant implications for the security of undersea infrastructure and highlights the need for a coordinated response to address these threats.

Russia's Invasion of Ukraine

Despite the price cap, Kyiv School of Economics estimates that Russia earned an extra $9.4B throughout 2024. Sanctions experts say that the price Russia gets for its oil has increased, and the reduction it sees overall is now less than $10 per barrel, which has allowed Russia's oil profits to steadily increase.

In light of the political distractions and uncertainty in Western states' commitment to Ukraine, Russia will continue its campaign to bomb Ukrainian cities and critical infrastructure into submission. Despite Russia's overall poor economic performance since the beginning of the invasion, the $9.4B generated illicitly over the course of one year significantly reduces the severity of its economic problems. Russia's ability to resource its illegal war in Ukraine, through grain theft, sanctions evasion and obfuscated oil transactions, will continue unabated unless further pressure is applied to the Shadow Fleet.