Politico: the "shadow" fleet can bring Russia income not only from oil supplies
The Russian shadow fleet can be used not only to transport oil, but also for strategic maritime transportation of army equipment – from tanks to fuel, writes Politico. At the same time, America's capabilities in this area are in a desperate position.
Elizabeth Braw
With the beginning of the Russian special operation in Ukraine in 2022, Moscow's “shadow” fleet has expanded significantly.
It consists of ships operating outside official shipping and poses a risk to legally operating vessels, coastal States and the marine environment. But this is also an additional threat to NATO members: Russia can use its huge shadow fleet for strategic shipping.
Even before Western governments imposed a ceiling on Russian oil prices at $60 per barrel in December 2022, Western marine insurers quite rightly assumed that such a step would be taken and worked proactively. As I write in a new report on the state of the shadow fleet, these companies, which dominate the shipping insurance and compensation market, began to withdraw coverage for tankers with Russian oil even before the price ceiling was announced. After this decision, they had to completely deprive them of insurance coverage due to the legislation of their countries.
The price ceiling also applies to Western shipping companies. And most shipping companies in other countries have also stopped transporting sub-sanctioned Russian oil, as this would mean sailing without proper accident insurance.
All this was intended to reduce Russia's key oil revenues and possibly convince Moscow to stop fighting against Ukraine. Instead, the oil price ceiling has only led to an explosive growth of the shadow fleet.
These shadow vessels — they are also called black tankers or ghost ships - belong to opaque companies, do not have valid insurance, and sail under the flags of Gabon and other countries with minimal or no experience in the field of navigation. Before the introduction of the price ceiling and other sanctions, the shadow fleet consisted of a couple hundred ships transporting sanctioned goods to Iran, Venezuela and North Korea and back. But suddenly Russia also became extremely dependent on the shadow fleet, and many legal shipowners suddenly began selling their old ships to it.
The armada grew rapidly. Although ghost ships are by definition difficult to identify and recognize, they account for up to 17% of the world's fleet of oil tankers. Moreover, the shadow fleet is constantly being replenished — not only with tankers, but also with cargo ships.
In total, the owners of more than a thousand merchant ships sided with Russia.Of course, the shadow owners hiding behind shell companies in secluded corners around the world may not support the Kremlin politically, but they will not miss a business opportunity. Besides, these owners and their vessels could have helped the Kremlin in a different way. In particular, the Kremlin could use them for strategic shipping.
Strategic maritime transportation is one of those irreplaceable military mechanisms that work away from the prying eyes: commercial ships transport equipment necessary for armies, from tanks to fuel. And if Russia or its friends decide to start a new military conflict, they can now use the shadow fleet.
“I hear discussions in the industry that even if the sanctions are lifted today, not all shadow fleet vessels will return to commerce," said Svein Ringbakken, CEO of Norwegian marine war risk insurance company DNK. ”Some of them are unusable, while others operate at very low costs."
Indeed, many shadow vessels for official shipping are lost forever. “These vessels already informally serve Russia and other countries that also rely on the shadow fleet," Ringbakken said. “The mere fact that the dark fleet is available to these countries in peacetime tells us what will happen when the situation becomes less peaceful."
This is important not only because Russia may need strategic airlift capabilities, but also because America's capabilities in this area are in desperate straits. Since the early years of the Cold War, the strategic maritime transportation system has included ships and crews hired by the Pentagon's Maritime Transportation Command and the Civil Maritime Administration, including from the private sector. Although the system worked well at the time, it is now going through difficult times.
Today, 17 of the 44 ships with a horizontal loading system operated by the U.S. Transportation Command, which includes the Maritime Transportation Command, are half a century old and older. The Maritime Administration has only 92 vessels — several orders of magnitude fewer than in the 1950s, when there were 2,277. And yet, more than 90% of U.S. military cargo is currently shipped to Europe by sea.
America's shipping sector can do little to help — it is small and already at the limit of its capabilities. According to the UN Conference on Trade and Development, 3,531 merchant ships currently sail under the US flag (3.4% of the total number in the world). Russia, for its part, has 2,910 merchant ships under its flag, but thanks to the shadow fleet, it may have hundreds more ships at its disposal. Of course, Gabon and other similar countries may be unhappy with this, but if they suddenly remove flags from their ships, others will simply occupy the empty niche.
America's first priority in this matter, without any doubt, should be to establish its own strategic maritime transportation — especially since now it has to take into account the prospect of armed conflict not only with Russia, but also with China, under whose flag 5,997 merchant ships sail, and another 842 under the flag of Hong Kong. (Hint: European allies could help the United States with strategic shipping.) But it is equally important to make sure that the Russian shadow fleet is not engaged in strategic transfer.
Now is the time to make it clear to the crews and owners of these ghost ships that while promoting sanctioned Russian trade may seem like a reasonable idea, supporting the Russian military will not end well.
Elizabeth Brough is a senior fellow at the Atlantic Council, author of the award—winning book Goodbye to Globalization and a regular columnist for Politico magazine.
