Russia's growing dark fleet: Risks for the global maritime order

Europe & Eurasia Maritime Security NATO Non-Traditional Threats Russia Security & Defense

January 11, 2024

Russia’s growing dark fleet: Risks for the global maritime order

Since Russia’s invasion of Ukraine, the dark fleet of old vessels that lack proper insurance, have opaque ownership, and “flag hop” between different permissive ship registries has grown explosively, to an estimated 1,400 ships. Their presence poses considerable risk to other ships, to the environment, and to countries experiencing maritime accidents caused by the vessels. In addition to serving the transportation needs of Russia (as well as Iran, North Korea, and Venezuela), the shadow fleet forms quintessential “gray zone” aggression, causing tangible harm that targeted countries can do little to punish. If countries do try to block dark ships from their waters, or escort them away, it could prompt retaliation and escalation by Russia.

I. Introduction

II. Background

III. Changes in tanker traffic from Russia

IV. Shadow fleet incidents and accidents

V. Can countries block the dark fleet?

VI. The shadow fleet and sanctions: Harm and gray zone aggression

I. Introduction

Economic sanctions are designed to throttle the sanctioned country’s business activities and make daily life so cumbersome that its citizens and eventually its rulers begin questioning the country’s policies. That’s also what Western governments are trying to achieve through their sanctions against Russia, including the oil price cap introduced in December 2022 by a coalition including the Group of Seven countries and the European Union.¹ They and other Western countries already promised to phase out Russian crude oil from their own markets. The price cap, which barred Western shipping and insurance companies from involvement in Russian crude exports above $60 per barrel, was intended to significantly reduce Russia’s oil exports and thus its revenues. They and other Western countries already promised to phase out Russian crude oil from their own markets. The price cap, which barred Western shipping and insurance companies from involvement in Russian crude exports above $60 per barrel, was intended to significantly reduce Russia’s oil exports and thus its revenues.

But Russia has been successful in circumventing these sanctions, especially through its extensive use of so-called shadow vessels, which are old and lack proper insurance. These vessels play a role in the gray zone, state-linked aggression below the threshold of armed military violence.² That results in considerable expense for vessels they damage and the countries in whose waters the accidents occur. The dark fleet has already begun causing incidents—from the Bay of Gibraltar to the waters of China, Cuba, and Indonesia, to name a few—and the calamities will quickly mount, not just because the shadow fleet is growing rapidly but also because it is aging, making the vessels increasingly susceptible to malfunction.

II. Background

The shadow fleet, also known as the dark fleet, comprises mostly aging ships that sail without the industry’s standard Western insurance, have opaque ownership, frequently change their names and flag registrations, and generally operate outside maritime regulations. Because the world lacks a maritime police, vessels have operated in this manner for practically as long as there has been an organized maritime industry. However, in recent decades, as Western governments have imposed economic sanctions on Iran, North Korea, and Venezuela, the fleet has become an established phenomenon. Indeed, the three countries have perfected the use of such ships, which transport all manner of goods. The fleets thus ensure a tolerable existence for the sanctioned countries’ citizens in addition to generating revenues for hostile activities such as Iran’s nuclear program. (Regular shipping lines don’t transport sanctioned goods as Western insurance would not insure such cargo.)

In the months since Russia’s 2022 invasion of Ukraine, vessels have joined the shadow fleet at an extraordinary rate. Twelve months into the war, the fleet had grown to some 600 tankers and other types of vessels. According to the commodity trading firm Trafigura, some 400 crude-oil tankers were among the vessels that had gone dark—some 20 percent of the world’s total crude-oil fleet.³ In a subsequent report, the analytics firms Vortexa and Windward estimated the number of dark vessels at 1,100. The firms also noted that the Russia’s war on Ukraine had triggered the emergence of a smaller category of noncompliant vessels, the “gray fleet,” which haven’t gone completely dark but whose ownership and sanctions compliance are difficult to ascertain: the gray fleet encompasses some 900 vessels, they estimated. That meant that the dark fleet made up ten percent of the global wet cargo fleet (i.e., carrying liquids), while the gray fleet accounted for eight percent.⁴ And the fleet kept growing rapidly: by October 2023, Windward raised its estimate of the dark fleet to 1,400 vessels, up from 1,100.⁵ But in reality, nobody knows for certain how many shadow vessels there are. In December 2023, Vortexa calculated that 1,649 vessels have operated in the opaque market since January 2021, including 1,089 tankers transporting Russian crude.⁶

The existence of the shadow fleet matters greatly, not just because the vessels are old but also because they don’t comply with the rules that govern maritime operations. Several aspects are of particular significance:

Shadow vessels lack Western protection and indemnity insurance. P&I insurance is the industry standard; other types of insurance—such as the alternative schemes offered by the Russian and Iranian governments—are highly insufficient.⁷ By October 2023, two thirds of tankers carrying Russian crude oil were insured by “unknown.”⁸
Shadow vessels’ owners are based in non-Western countries and disguise their identities through complex arrangements. In many cases, they are entirely new outfits that even lack an address.
Because new vessels are too valuable to use in the risky shadow fleet, dark vessels are old. Indeed, the rise of the shadow fleet has kept old vessels in traffic. Before Russia’s invasion of Ukraine, vessels more than twenty years old made up three percent of the global tanker fleet. Their share is now expected to rise to 11 percent by 2025.⁹
Since they operate outside established maritime regulations, shadow vessels don’t undergo regular maintenance.
Shadow vessels engage in risky ship-to-ship transfers of sanctioned cargo.
To disguise their activity, shadow vessels frequently turn off automatic identification systems (AIS).¹⁰

III. Changes in tanker traffic from Russia

Tanker traffic from Russia via the Baltic Sea gives a good indication of shadow fleet activity (though some tankers departing Russian ports are not dark ships).

Between March 2020 and March 2022, journeys by crude-oil tankers taking this route grew significantly. Analysis by the Norwegian Coastal Administration shows an increase from an average of 662 journeys per month during that period to an average of 955 voyages per month between April 2022 and September 2023. The size of the crude oil tankers also grew. Between 2020 and 2022, their total deadweight—the weight of cargo a ship is able to carry—increased from 60,354,000 metric tons to 92,043,000 metric tons. Notably, the increase began in April 2022. The length of the tankers also increased, from around 247 meters in 2020 to around 250 meters in October 2023. In another important development, the average age of the crude oil tankers increased from an average of 8.3 years in 2020 to 14.6 years in 2023 (January-November). At the time of writing, the average age of crude oil tankers departing from Kaliningrad is particularly high: 29.3 years, up from 15.4 years in 2020.¹¹ The crude oil carriers’ destinations have also changed significantly since Russia invaded Ukraine. The Norwegian Coastal Administration analysis shows that from 2020 until the end of January 2022, most calls by crude oil tankers from Russia via the Baltic Sea were to European or US ports. Starting in 2022, the majority of the vessels’ port calls took place in India, Greece, China, and Morocco; the Norwegian Coastal Administration also observed ship-to-ship transfers by the tankers to other tankers off the coasts of Morocco and Greece.

Liberia, a so-called flag-of-convenience state, remains the dominant flag state for vessels leaving Russian ports via the Baltic Sea (as well as along Norway’s western coast). It’s followed by the Marshall Islands, Russia, and Panama, whose vessels also increased their journeys along the two routes. Journeys by vessels sailing from Russian ports under other countries’ flags decreased. (The Marshall Islands and Panama are flag-of-convenience states.) In another noteworthy development, since 2021 six other flag-of-convenience states (Cook Islands, Gabon, Cameroon, Palau, Saint Kitts and Nevis, and Vietnam) have also begun transporting Russian crude oil. The increase in journeys under convenience flags also indicates an increase in shadow vessel operations. Gabon has, in fact, become the destination of choice for dark vessels; according to S&P Global Market Intelligence, Gabon’s ship registry doubled in size during the first half of 2023, and an estimated 98 percent of the tankers sailing under its flag are high-risk or have no identifiable owner.¹²

IV. Shadow fleet incidents and accidents

The nature of the shadow fleet’s aging and poorly maintained vessels makes incidents and accidents far more likely than is the case in regular shipping. Incidents are also made more likely by the fact that the vessels turn off their AIS, which means authorities and other vessels don’t know their location. The fact that the vessels frequently engage in risky ship-to-ship transfers further adds to the risk of incidents.

These risks matter because the shadow vessels lack proper insurance. In case of an incident involving a legally operating vessel, that vessel (through its insurer) is likely to have to pay. “The little piece of paper a dark ship may have that says it’s insured is not worth the paper it’s written on,” Simon Lockwood, a maritime executive with the insurance broker WTW, said in conversation with the author for a Politico Europe article in October 2023; incidents involving a legally operating vessel and a dark one are “like having a crash with an uninsured driver,” he added.¹³ If the incident involves only the dark vessel, the country in whose territorial waters or exclusive economic zone the incident occurs faces having to handle it without financial contribution from an insurer. With P&I, Lockwood noted, “there’s protection if there’s an incident. If a shadow fleet tanker breaks up in the English Channel, who pays? The UK and French taxpayers will have to pay.”¹⁴

That makes it extremely important to track dark fleet incidents. Such monitoring provides insight into the vessels involved and the type of incidents caused, which can be used for forward planning. It is, indeed, vital for governments and legally operating shipping companies to have a clear picture of vessels and accidents involving the shadow fleet, and it’s equally important for environmental organizations and seafarer welfare organizations to have a comprehensive understanding of the accidents.

Within just a few hours on February 20, 2023, for example, two shadow fleet tankers got into difficulty in the Bay of Gibraltar and had to be aided by tugs and a salvage ship. Both tankers had recently changed names and flag registrations, one to Palau, the other to Gabon.¹⁵ Without the vessels having proper insurance, taxpayers faced having to pick up the tab. A few months before that, the Cuban-flagged tanker Petion, carrying sanctioned Venezuelan oil, collided with another vessel off the coast of Cuba.¹⁶ In March 2022, the Panama-flagged tanker Arzoyi ran aground off the Chinese port of Qingdao.¹⁷ In May 2023, the Gabon-flagged tanker Pablo caught fire off the coast off Malaysia. Malaysian authorities responded to the incident, rescued the crew (though three could not be located) and extinguished the fire.¹⁸ In October 2023, the twenty-six-year-old Cameroon-flagged tanker Turba, which had its last inspection in 2017, lost engine power some 300 kilometers off the coast of Indonesia.¹⁹ And in December, Indonesian salvage teams had to rescue a twenty-three-year-old Cameroon-flagged shadow vessel carrying Venezuelan oil.²⁰

Worldwide maritime salvage operations are conducted using the Lloyd’s Open Form, under which a vessel’s owner accepts an offer from a salvage company to recover a vessel that is no longer operational.²¹ The salvage company conducts the recovery in exchange for a reward, typically part of the proceeds from the sale of the vessel or what remains of it. But the Lloyd’s Open Form depends on a vessel having a bona fide owner that can be located in case of an incident. As we have seen, shadow vessels typically don’t. At the time of writing, the charred skeleton of the Pablo remains off the coast of Malaysia.²²

If no salvage company is willing to remove the Pablo (either because no owner can be located or because the owner won’t agree to signing a Lloyd’s Open Form), the Malaysian taxpayer is likely to have to fund her removal. This expense would join those already incurred as Malaysian authorities responded to the explosion. The Malaysian taxpayer also faces footing the bill for the removal of the oil leaked by the Pablo; fortunately the vessel only carried a small amount of crude as she had just made a delivery. Although the International Oil Pollution Compensation Funds (IOPC Funds) provide financial compensation for oil tanker spills in its member states, it’s not yet clear whether it will compensate coastal states for spills by shadow tankers.

V. Can countries block the dark fleet?

Blocking shadow vessels from territorial waters or exclusive economic zones involves significant hurdles that make doing so unfeasible and even impossible. The United Nations Convention on the Law of the Sea (UNCLOS) grants vessels the right of innocent passage, which means the right to “freely navigate through territorial seas.”²³ A country’s territorial waters comprise the twelve nautical miles adjacent to its coast. The journeys must truly be innocent, defined by UNCLOS as “(a) traversing that sea without entering internal waters calling at a roadstead or port facility outside internal waters; or (b) proceeding to or from internal waters or a call at such roadstead or port facility.” Vessels must also obey the laws of the country whose waters they traverse; those laws include the ship being in good repair and possessing proper insurance. Most countries, though, would consider it too risky to try to block shadow vessels and suspected shadow vessels on such grounds, especially since there is no internationally acknowledged registry of shadow vessels.

UNCLOS provides more significant rights to vessels traveling in countries’ exclusive economic zones (EEZs), which extend 200 nautical miles beyond the territorial waters. A country has the exclusive rights to natural resources within its EEZ as well as the exclusive rights to offshore installations there. It does not, however, have legal powers over the EEZ beyond the policing of those resources and installations.²⁴ A country would thus struggle to ban shadow vessels from its EEZ. Retired Rear Adm. Nils Wang, a former chief of the Danish Navy (which is also responsible for most of Denmark’s coast guard functions), told me that “the whole construct of merchant shipping rests on very significant rights of free navigation. As long as you’re in the high seas, a country’s EEZ, or the outer edge of its territorial waters, you have the right to ‘innocent passage’. That means that if you’re not doing anything harmful to the environment or the seabed, the coastal country can’t impose any sanctions on you.”²⁵ If the ship enters a port or passes through the inner territorial waters, the territorial state can block the ship, but that doesn’t help the many countries whose waters the shadow vessels simply pass through. Countries are also wary of detaining shadow vessels in their waters, even if they have strong suspicions the vessels are violating maritime rules. “Nobody is interested in taking the vessels into a port and arrest[ing] the crew, because then you’re stuck with the ship in your harbor. Everyone hopes that it will pass your waters without any damage,” Wang noted.²⁶

A senior official in a NATO member state’s coast guard told me that “if the vessels have problems, we can intervene when they enter territorial waters, but there’s also a certain opportunity for intervention in the EEZ if the vessels threaten our installations.” Email correspondence of a coast guard official from a NATO member state with the author, November 17, 2023; the official is not named by mutual agreement. Such a ban, though, would take place against the background of the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution. The convention allows countries to “prevent, mitigate or eliminate danger to its coastline or related interests from pollution by oil or the threat thereof, following upon a maritime casualty.”²⁷ In other words, a country can ban a vessel from its waters if an oil spill seems likely.

According to my figures, some four dozen incidents involving suspected shadow vessels have already taken place. The incidents feature the same types of calamities: fires, engine failures, collisions, loss of steerage, and oil spills. Each time such an accident occurs, another vessel’s insurer or a government has had to cover most of the expenses involved. As the shadow fleet continues to grow, age, and cause more incidents, these expenses will grow rapidly. For the authorities of the countries in whose waters the incidents occur, the burden of carrying out many more incident responses will continue to climb.

In an interview, Wang outlined the vast scope of the burden for coastal nations, citing the International Convention on Maritime Search and Rescue:

If you have a ship in distress, the coastal state has obligations according to the search and rescue convention. The entire globe is divided into thirteen search and rescue zones. Australia and New Zealand, for example, have search and rescue obligations pretty much all the way down to the Antarctic. No matter where you are, if you’re in distress a specific coastal state will have Search and Rescue responsibility. That means that as a coastal state you’re obliged to save persons distress if the vessel is within your geographic area of responsibility. You can’t start speculating whether it has insurance.²⁸

For the environment, the likely growth in shadow vessel incidents poses a similarly large burden. Because most of the shadow vessels carry oil, the risk of oil spills is concrete. The Pablo oil spill was relatively minor because she had just made a delivery, but other shadow vessels are likely to catch fire, explode, or collide carrying significant amounts of oil. Countries’ authorities may also be reluctant to ban entry under the “Intervention Convention, since the vessel’s owner can demand compensation on the basis that an entry ban is too harsh.²⁹ The country in whose waters the accident occurs thus faces the burden and expense of cleaning the spill up, and its maritime environment will face the harm caused even by a cleaned-up oil spill. Even if IOPC decides to provide compensation for oil spills caused by dark vessels, it’s unlikely to be able to sustain the regular oil spills that are likely to be caused by the fleet.³⁰

VI. The shadow fleet and sanctions: Harm and gray zone aggression

The shadow fleet poses mounting risks to other vessels, to coastal countries, and to countries in whose search and rescue areas of responsibility the vessels may have incidents. Already a risk when the fleet was relatively small and primarily serviced Iran and Venezuela, its explosive growth since early 2022 means it’s likely to cause far more extensive harm to other ships (and their owners and insurers) and to countries in whose waters it sails.

The incidents and accidents caused by shadow vessels are, one might argue, a by-product of sanctioned countries’ efforts to keep their economies afloat. Seen from that perspective, fires, explosions, collisions, mechanical failures, and oil spills involving dark vessels are accidental harm.

But Russia is also instrumentalizing the dark fleet, using it especially as a primary conveyor of oil exports. If it acted in good faith, the Russian government could issue insurance covering all the damage dark vessels are likely to cause and introduce mandatory maintenance for the vessels. It could, in other words, ensure that the shadow fleet operates on safety and insurance standards similar to those of the legal fleet.

Russian authorities, though, have done no such thing. Instead they (like the governments of Iran, North Korea, and Venezuela) build the country’s economic well-being on a fleet that causes financial and environmental harm wherever the vessels go. The countries and companies facing the bills, meanwhile, can do little to prevent the vessels from traversing territorial waters, EEZs, and especially the high seas: there is no official list of dark vessels and governments would be loath to risk escalation with Russia.

The shadow fleet, in fact, seems intended not just to transport goods to and from Russia but to cause harm to other countries. The countries that have chosen to trade with Russia by means of shadow vessels clearly do so in the knowledge that such vessels can cause incidents in their waters, but they evidently calculate that the benefits of sanctions-busting trade with Russia outweigh the costs of potential shadow-vessel incidents.

Countries that don’t utilize the shadow fleet but whose waters the vessels use are the real victims of the shadow activities. Denmark and Norway, located on the shadow vessels’ routes to and from Russia, are prime examples—one maritime insurer calculates that twelve shadow vessels pass through Norwegian waters on an average day³¹–but so are the random countries in whose waters the vessels perform ship-to-ship (STS) transfers.

The Norwegian Coastal Administration told me it has seen significant changes in traffic with crude oil tankers from Russia through the Baltic Sea.³² This route originates in Russia’s Baltic ports of Saint Petersburg, Primorsk, and Kaliningrad and ends in the North Sea, from where the vessels travel to their final destinations. It goes through the Baltic Sea, which includes Swedish, Finnish, Estonian, Latvian, Lithuanian, and Polish waters, but primarily Danish waters, as the route continues through the Great Belt and Skagerrak, and on to the waters north of Denmark and south of Norway and then the North Sea. (The Great Belt is considered an international strait, though it’s administered by Denmark, which also provides optional pilotage.) Vessels departing Russia’s Arctic ports can also sail around Norway’s North Cape and south along the Norwegian coast. According to analysis by the Norwegian Coastal Administration, most crude oil tankers use the Baltic Sea route, which puts Denmark in particular at risk of oil spills and other incidents.³³ Since 2022, the tankers traveling the Baltic Sea route have grown in both size and length.³⁴

In particular, the Norwegian Coastal Administration found that within a few months of Russia’s invasion of Ukraine, the sailing pattern of the tanker fleet from Russian Baltic Sea ports had changed. Transport of crude oil had increased, and the oil was being transported over longer distances. The Norwegian Coastal Administration considers it likely that part of the oil leaving Russia’s Baltic ports is being transshipped—delivered to other tankers through STS transfers—several times before reaching a final destination. Some of the tankers monitored by the Norwegian Coastal Administration show unexplained stops in the Mediterranean and the Arabian Seas, which suggests likely ship-to-ship activities.³⁵

The US government has sought to remind countries and ports that receive shadow vessels of the costs and environmental harm that could result, but this has not led to any significant change in behavior. In October 2023, the US Treasury Department’s Office of Foreign Assets Control (OFAC), which administers US economic sanctions, sanctioned one shadow vessel operator based in the United Arab Emirates and another one based in Turkey, along with two vessels operated by them.³⁶ In early December OFAC sanctioned another three operators and three vessels, while the United Kingdom sanctioned twenty-one vessels.³⁷ That, though, still leaves virtually all dark ships in operation, and as long as Western sanctions against Russia remain, more ships will enter the dark fleet. A few days after the December sanctions were imposed, one of the vessels sanctioned by OFAC—which flies the Liberian flag and whose owner owns no other vessels—was found loitering in international waters off Malta.³⁸

The International Maritime Organization (IMO) also has tried to address the problems caused by the parallel fleet. Ahead of the IMO Assembly’s semiannual meeting in November-December 2023, a group of IMO member states submitted a draft IMO Assembly resolution that would oblige member states to take action. Iran, however, objected to the resolution, especially the use of terms like “dark ship” or “illicit,” which Iran noted are not defined in international law. The country—which has an obvious interest in allowing the dark fleet to continue to operate—instead proposed that the IMO improve the standards for ship-to-ship transfers.³⁹ In the end, the IMO Assembly adopted a resolution calling on flag states to “adhere to measures which lawfully prohibit or regulate” ship-to-ship transfers. The resolution also stipulated that ships update their operation plans for STS transfers, “especially if engaged in a mid-ocean transfer with another vessel,” and recommended that port states conduct enhanced inspections on suspected shadow vessels.⁴⁰

But even though the resolution is hardly burdensome, countries and ships can choose to ignore it. “Maybe the solution is to pass regulation on ship acquisitions. But ship ownership has been difficult to monitor, because the demand for transport contraband will always be there,” Wang observed.⁴¹ In November 2023, the European Commission proposed banning the sale of crude oil tankers to Russia. Under the proposal, the sale of tankers by EU-based entities to third countries could include a clause that bans the buyer from selling the vessel on to a Russian buyer.⁴² It is, however, unlikely that the authorities in such countries would enforce such a ban, and as shown above, shadow vessels transporting Russian cargo are typically owned by obscure entities typically not registered in Russia.

The potential harm to coastal states is tangible, but since the aggression doesn’t involve military means it’s virtually impossible for a country to avenge harm caused to it by a shadow vessel, even if it can prove the ship is transporting Russian cargo. The EU has proposed that Denmark could conduct insurance inspections on suspected shadow-fleet vessels passing the Great Belt.⁴³ But if the Danish Navy (which, again, is also responsible for most coast guard functions) tried to block a confirmed dark vessel from entering Danish waters on the grounds that it lacked the necessary insurance and maintenance record, Russia could retaliate, either by sending navy vessels to the dark vessel’s aid or through completely different measures of its choosing. In an era of gray zone aggression, the plot lines of Okkupert (Occupied), a Norwegian television thriller involving a Russian invasion to restart oil and gas production,⁴⁴ may no longer be purely a matter of fiction.

Indeed, the shadow fleet forms a clear example of gray-zone aggression. As long as Russia remains under sanctions, it will continue to use the shadow fleet for trade—and for subliminal aggression against other countries. Though tackling the shadow fleet is extremely challenging, countries should start by recognizing that the fleet is not just a tool for maritime transportation.

VII. About the author

Fellow

Elisabeth Braw

Senior Fellow

Scowcroft Center for Strategy and Security Transatlantic Security Initiative

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