HomeMediaLatest NewsA naval battle: how the US is hunting for the Russian shadow fleet

A naval battle: how the US is hunting for the Russian shadow fleet

08 August 2024

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, gave an interview to the business magazine Profile about the current situation around the "shadow fleet" transporting Russian oil.

According to Alexey Gromov, the volume of the shadow tanker fleet, "which serves Russia on an almost regular basis," is about 500-550 vessels. Shadow fleet operating companies are firms from the UAE, Bahrain, India, Hong Kong, Turkey, etc. The owners of the vessels are also registered there. Most of these companies (both owners and operators) appeared in the period from 2022 to 2024, at the same time the active purchase of old oil tankers, often prepared for decommissioning, aged 15-20 years, began.

By the way, it can also be assumed that a significant part of the vessels of Russian companies like Sovcomflot went into the shadows after felling under American sanctions.

Today, no one is interested in rocking the oil price swing: there is an election campaign in the United States, and the authorities want to keep gasoline prices at an acceptable level inside the country; the Middle East is smoldering – it is unclear how far the escalation in the Iran-Israel conflict will go. In general, neither Washington nor Brussels dream of the escalation of the sanctions story into an uncontrolled tsunami. Another thing is to gradually tighten the stranglehold, reducing the income of Russia from energy exports.

In general, sanctions are a fine–tuning tool: if the situation on the oil market is defined as a fragile balance, then pressure on Russia will be moderate, if there is a supply surplus, then the sanctions stranglehold will be tightened more.

The most realistic forecast, according to Alexey Gromov, is the continuation of the trends that have been observed since the autumn of 2023: every month we will hear about new ships on the sanctions lists, and our oil companies will come up with new mechanisms to circumvent sanctions.

According to Gromov, the strategic solution is to create a "parallel independent financial and logistical circuit" of Russia's foreign trade in sanctioned goods. In the future, such a contour could be a trade system built within the framework of the BRICS – the countries are already working on a mechanism for internal settlements, independent of the Western financial architecture. If we add to this an independent system of cargo transportation, insurance, etc., then we will be strategically protected from increased sanctions pressure.

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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