Western firms profit from shadow fleet aiding russian oil trade
Western companies have made billions of euros by selling old, rusty tankers to the so-called shadow fleet, which transports Russian oil. This circumvents Western sanctions and funds Russia's war in Ukraine, according to an investigation by the Dutch portal Follow the Money.
A rusty tanker docked at the port of Rotterdam on October 27, 2023. The ship, 603 feet long, was called "Chemtrans Uranus" and sailed under the German flag. Dozens of similar tankers load and unload oil products daily at this busy port in the Netherlands, writes the portal in a report published on Tuesday.
A few days later, the tanker left Rotterdam with a new name—"Coast Buster." Instead of the German flag, the blue-white-red flag of the African state of Liberia flew at its stern. "Coast Buster" set course for the port of Murmansk in Russia.
Soon after, two other tankers owned by German stakeholders underwent a similar transformation in the same port. Upon arrival in Rotterdam, all were managed by the Hamburg shipping company Chemikalien Seetransport. When they later set course for Russia, they were already owned by Rhine Marine Services. Despite its German-sounding name, the company is based in Mumbai, India.
Where does Russia get the "shadow fleet" from?
The three tankers were sold for $54 million. The European Union has banned the direct sale of ships to Russian firms, so they are bought by companies registered in countries such as India, Seychelles, Hong Kong, or Vietnam. This is legal in these circumstances.
According to Benjamin Hilgenstock, chief economist at the Kyiv School of Economics, although the ships are not owned by Russia or Russian companies, there is no doubt about who is behind the mysterious third-country buyers. "It can be safely assumed that the buyers come from Russia and that Russian interests are behind these companies," he said.
Journalists from Follow the Money believe the three tankers are currently part of the Russian "shadow fleet." This includes over 600 ships registered in countries worldwide, transporting Russian oil through opaque ownership structures—and without proper insurance in case of environmental disasters.
Thanks to these operations, the Kremlin circumvents sanctions on oil sales imposed by the West, including the European Union. Russia uses these ships to sell oil at prices higher than the price cap set by Western countries in 2022. This provides the Russian state with additional billions of dollars in revenue, which it allocates to funding the war in Ukraine.
Follow the money: Who profited from the old ships in the shadow fleet?
According to the investigation by Follow the Money, over one-third of the shadow fleet (230 ships), mostly consisting of old and worn-out tankers, previously belonged to owners from Western countries. The owners sold them at exceptionally high prices. Ships that would otherwise have been scrapped since 2022, when the war in Ukraine began, have now generated over $6 billion in profits.
Even though sanctions against this trade have recently been expanded, little was done in the past to prevent the sale of old tankers to the "shadow fleet." Europe is now reaping the bitter fruits of this situation: the war continues, obsolete ships are used for espionage and sabotage, and environmental disasters loom, the article reads.
The Kyiv School of Economics has published a list of all suspicious tankers used to transport Russian oil. For the study, Follow the Money and its media partners analyzed information about their shipping routes and tanker prices from marine brokers' reports. Interviews were also conducted with dozens of experts and industry insiders.
At the end of 2022, the G7 countries introduced a price cap on Russian oil. The idea was to limit Russia's income as it could no longer sell oil and petroleum products above this price.
Follow the Money is conducting an investigative project on the shadow fleet in collaboration with 13 other editorial teams and 40 journalists worldwide.
