The Core of Russia’s Shadow Fleet: Identifying Targets for Future Tanker Designations

KSE Institute has presented a new study, “The Core of Russia’s Shadow Fleet: Identifying Targets for Future Tanker Designations,” aiming to provide coalition governments with a priority list of vessels for future designations. This study follows June’s report, “Assessing Russia’s Shadow Fleet: Initial Build-Up, Links to the Global Shadow Fleet, and Future Prospects.” 

The topic of the shadow fleet has received serious attention in recent weeks, including at the European Political Community Summit in July, when the new UK government garnered substantial support for its ”Call to Action”. Previously, Denmark had also been engaged in forming a coalition of countries to address this issue. A new study by KSE Institute should help to effectively identify tankers that could be sanctioned, significantly weakening Russia’s shadow fleet. 

The key findings from the analysis are as follows:

1. From January 2023 to June 2024, 307 shadow tankers carried Russian crude oil at least once, but only a subset, identified in the study as 45 tankers, operated consistently across all six quarters. These 45 tankers, forming the “core” shadow fleet, accounted for 28% of the total fleet’s deadweight tonnage in H1 2024.

2. Regarding Russian oil products, a total of 432 shadow tankers transported them at least once, but only a subset, identified in the study as 41 tankers, were involved consistently in each of the six quarters from January 2023 to June 2024. These 41 tankers, forming the “core” shadow fleet, accounted for 29% of the total fleet’s tonnage in H1 2024.

3. Of the 45 crude oil tankers and 41 oil products tankers identified as part of the “core” Russian shadow fleet, 8 vessels have been sanctioned by the US, EU, and/or UK – 6 for transporting crude oil and 2 for oil products. Despite these measures, many vessels critical to Russia’s evasion of the price cap regime remain unaffected. Since the fall of 2023, a total of 64 shadow fleet vessels have been designated.

4. In the first half of 2024, new vessels were added to the shadow fleet, offsetting the impact of sanctions. For crude oil, designated tankers total 6.05 million tons in deadweight, while new vessels add 8.90 million tons, with 1.92 million tons used regularly. For oil products, the numbers are 0.69 million tons, 8.15 million tons, and 0.98 million tons, respectively. Altogether, the shadow fleet’s potential deadweight tonnage has remained largely unchanged.

5. Due to the limited vessel designation campaign and Russia’s ability to add new capacity, the shadow fleet’s share of crude oil exports rose to 89% in June 2024, and remained stable for oil products at 35-45% in H1 2024. This absence of capacity constraints has kept the discount on Russian oil exports from rising and maintained robust export earnings.