LONDON, United Kingdom–Since Russia invaded Ukraine in February 2022, the number of oil tankers with opaque ownership or without proper insurance has soared.
Experts say that has allowed the Kremlin to build a shadow or so-called ghost fleet to export its oil despite a Western-imposed embargo and price cap on its global sales.
- What is a 'ghost fleet'? -
The Kyiv School of Economics (KSE) defines a "ghost fleet" as commercial vessels that are neither owned by countries in the G7 coalition with the European Union, or that do not use protection and indemnity (P&I) insurance.
"It is not unusual, even before the war," said KSE economist Elina Robakova.
"The shadow fleet is also used to avoid the normal business model" such as high insurance costs, she told AFP.
Such ships, also called "dark fleets", are also used by countries such as Iran and Venezuela, which are both under US oil sanctions, and even North Korea, said Atlantic Council researcher Elisabeth Braw.
According to statistics from Lloyd's List Intelligence, the number of these types of ships doubled last year and now make up some 10 percent of oil tankers operating internationally.
That accounted for some 1,400 ships, the Atlantic Council said in January.
- Why is Russia using one? -
Russia has been slapped with an oil embargo, a price cap on Russian crude and a ban on providing services to ship oil by sea to stop it financing its war with Ukraine.
To get around them, Moscow has had to reduce its dependence on Western maritime services by buying tankers and providing its own insurance, said Rystad Energy, a consultancy.
Ribakova estimates that more than 70 percent of Russian oil transported by sea uses the ghost fleet.
KSE estimated in its "Russian Oil Tracker" report in December that 179 loaded shadow fleet tankers left Russian ports in November 2023.
Last October, the Russian shadow fleet enabled the export of some 2.3 million barrels per day of crude and 800,000 barrels of petroleum products out of a total Russian production of 10 million barrels a day, it added.
- What are the risks? -
"Most of this dark fleet have not been inspected recently, have substandard maintenance, unclear ownership, no insurance and are being operated to circumvent sanctions and high insurance costs," said Lloyd's List Intelligence in December.
KSE regularly warns that the ageing vessels pose "huge environmental risks for the EU", as the ageing, poorly maintained vessels skirt the coastlines of several European countries.
Ships built more than 20 years ago are expected to comprise 11 percent of the global tanker fleet by 2025, according to the Atlantic Council.
Before the war in Ukraine, the figure was three percent.
None of the ships in the Russian ghost fleet has adequate P&I insurance -- a must for commercial vessels to cover risks from war, collisions or environmental damage such as oil spills.
Some 90 to 95 percent of the P&I insurance market is made of insurers from the European Union and the UK, both of which have slapped sanctions on Russia.
For the Atlantic Council, the shadow fleet is a non-military but powerful weapon because Ukraine backers would pay the price in the event of an accident at sea with a Western ship, or an oil spill.