Russia has expanded its shadow fleet that it uses to evade oil sanctions, think tank says

• Russia added 74 ships to its shadow fleet of oil tankers, according to the KSE Institute.
• The new ships outnumber the 49 tankers that have been sanctioned by the West, Bloomberg reported.

Russia has beefed up its under-the-radar fleet of oil ships, a sign that the nation is taking bigger steps to evade Western trade restrictions, according to a Ukrainian think tank.

The KSE Institute, a think tank within the Kyiv School of Economics, pointed to Russia's so-called shadow fleet of tankers, a covert collection of tankers the nation has been known to use to keep its oil trade going despite strict sanctions from the West.

Russia was known to carry its oil on 307 shadow ships from the start of 2023 through June 2024, with around 74 new ships being added to its fleet over the first half of this year, the think tank said in a report.

The new ships outnumber the 49 tankers that have been sanctioned by the West for helping Russia evade sanctions, Bloomberg reported — a possible sign the nation is trying to offset the impact of Western sanctions on a key source of income for the Kremlin.

Around 45 of the known shadow ships have operated regularly between 2023 and the first half of this year, the report added. Those ships make up the nation's "core" shadow fleet of tankers, accounting for 28% of all oil Russia traded under the radar in the first half of this year.

"To put additional pressure on Russia's ability to finance its war of aggression against Ukraine, we urge coalition governments to designate additional shadow fleet vessels," the think tank added, suggesting sanctions were needed on Russia's core fleet in particular. "Their removal would represent significant sunk costs, while forcing Russia to rely more heavily on mainstream fleet ankers, which fall under the price cap."

The West began tightening the screws on Russia's oil trade soon after it invaded Ukraine in 2022, with the G-7 nations establishing a $60 price cap on Russian crude. Sanctions have dealt a blow to Russia's oil revenue, central bankers said earlier this year, despite Putin brushing off the impact of trade restrictions as insignificant.