Australia imposes first sanctions on Russian shadow fleet

Australia imposed targeted sanctions on 60 ships linked to Russia's shadow fleet, its foreign affairs ministry said June 18.

This marks the first time the country has taken action against the shadow fleet, which is used by Russia to circumvent international sanctions to sustain its war against Ukraine, the ministry added.

"Operating under deceptive practices, including flag-hopping, disabling tracking systems, and operating with inadequate insurance, the shadow fleet enables the illicit trade of Russian oil and other sanctioned goods," Australia's Foreign Affairs Minister Penny Wong said.

"These sanctions reinforce Australia's consistent commitment to ensuring Russia, and those enabling its illegal invasion of Ukraine, face consequences."

So far, Australia has imposed over 1,400 sanctions in response to Russia's full-scale invasion of Ukraine and has been calling on Russia to end this war and withdraw from Ukrainian territory.

Other countries, such as the UK, have also taken similar steps to slap sanctions on selected ships to undermine Moscow's war chest in its war against Ukraine.

This comes as the global shadow fleet has been growing. A joint study by S&P Global Energy and Market Intelligence found 940 crude and product tankers, or 17% of the global in-service tanker capacity, were either confirmed by Western authorities to have violated sanctions or at high risk of breaching them as of May.

This is a 59.1% increase compared with 591 tankers, or 10% of the global fleet, in April 2024, based on a previous study from Energy and Market Intelligence.

In May, Russia had hiked seaborne crude exports on non-G7 tankers by 30%, a dramatic reversal from recent trends even amid some of the largest Western sanctions enforcement to date.

About 2.95 million b/d of Russian seaborne exports, or 80.9% of its total volumes, had been loaded on shadow ships, compared with 64.1% in the previous month and was the highest in six months, data from S&P Global Commodities at Sea and Maritime Intelligence Risk Suite showed.

Apart from concerns over Russia's coffers, the rise in shadow fleets also mean increased safety risks for other ships at sea, as these ships lose access to insurance and maintenance services in many parts of the world after being blacklisted by governments.

Data from classification society DNV showed 52% of ship incidents involved ships aged 20 years or more in 2024, up from 43% a decade ago.

The global tanker fleet has continued to age partly because shipbreakers in South Asia are unwilling to recycle sanctioned tankers from shadow fleet operators, Platts reported earlier.