Russia has spent almost £2 billion building a ‘dark fleet’ of tankers that skirt sanctions to ship banned oil around the world, according to a top official.
The scale of the sanctions-swerving, which experts say involves up to 1,800 vessels whose ownership is opaque, is revealed on the second anniversary of Moscow’s invasion of Ukraine that sparked international curbs on Russian trade.
But western sanctions – including a $60 cap on a barrel of Russian oil – have been criticised for being ineffective and failing to stop the flow of cash fuelling Russia’s war machine.
The price cap – well below the market rate of $80 a barrel – was designed to limit the Kremlin’s huge revenues from oil exports without causing another spike in global energy costs. But Russia is still exporting as much oil now as it was two years ago.
It has got round the sanctions by creating a parallel shipping structure that transports Russian oil using complex routes.
‘Dark fleet’: The scale of the sanctions-swerving, which experts say involves up to 1,800 vessels whose ownership is opaque, is revealed
The shadow fleet is believed to have a large number of vessels older than 15 years – the age at which mainstream oil companies would typically retire them due to wear and tear.
‘They would otherwise have gone for scrap,’ said Mike Salthouse, of marine insurer NorthStandard.
The size of this parallel fleet has ‘grown significantly’, added Olga Dimitrescu of the UK Office of Financial Sanctions Implementation (OFSI).
‘But that comes at a significant cost to Russia,’ which she put at nearly £2 billion. That’s $2.25 billion that’s spent by the Putin regime on tankers not tanks,’ she added.
Experts say the price cap hasn’t worked because it has incentivised black market trading in Russian oil. Former spy Christopher Steele thinks secondary sanctions have to be considered because countries like China and Turkey import cheap Russian oil, refine it and export it at ‘a great profit’ to the UK, he told ITV’s Peston programme.
Labour MP and anti-corruption campaigner Dame Margaret Hodge has urged a tougher approach on sanctions following the suspicious death of Russian opposition leader Alexei Navalny in a Siberian prison.
In a letter to Foreign Secretary Lord Cameron, she pointed out that the UK’s maritime insurance industry underwrites a third of all Russian oil that was moved by sea cargo between the implementation of sanctions and November 2023.
‘Shockingly, some of this oil was sold at prices above the price cap, in clear violation of sanctions,’ she said.
Cameron last week unveiled a fresh round of sanctions targeting oil traders and energy projects.
