How Western firms fuel Russia's war with aging tankers
Western companies have profited substantially by selling aging, rusty tankers to the so-called shadow fleet, which is used to transport Russian oil. This bypasses Western sanctions and contributes to funding Russia's war in Ukraine, as reported by the Dutch portal Follow the Money.
A rusty tanker docked at the port of Rotterdam on 27 October 2023. The ship, 184 metres long, was named "Chemtrans Uranus" and flew the German flag. Dozens of similar tankers load and unload oil products daily at this bustling port in the Netherlands, writes the portal in an article published on Tuesday.
A few days later, the tanker departed Rotterdam under a new name—"Coast Buster." Instead of the German flag, the blue, white, and red flag of Liberia fluttered at its stern. "Coast Buster" set course for the port of Murmansk in Russia.
Soon after, two other tankers owned by German entities underwent a similar transformation in the same port. Upon their arrival in Rotterdam, all were managed by the Hamburg shipping company Chemikalien Seetransport. When they later set course for Russia, they were already owned by Rhine Marine Services. Despite the German-sounding name, the company is based in Mumbai, India.
Where does Russia get the "shadow fleet" from?
The three tankers were sold for $54 (£44) million. The European Union has banned the direct sale of ships to Russian firms, so they are purchased by companies registered in countries such as India, Seychelles, Hong Kong, or Vietnam. This remains legal under current regulations.
According to Benjamin Hilgenstock, chief economist at the Kyiv School of Economics research institute, although the ships are not owned by Russia or Russian companies, there is no doubt about the identity of the mysterious third-country buyers. "It can be safely assumed that the buyers are from Russia and that Russian interests are behind these companies," he said.
Journalists from Follow the Money believe the three tankers are currently part of the Russian "shadow fleet." This fleet comprises over 600 ships registered in countries worldwide, transporting Russian oil through opaque ownership structures—and often lacking proper insurance in case of environmental disasters.
This allows the Kremlin to circumvent the sanctions on oil sales imposed by the West, including the European Union. Russia uses these ships to sell oil at prices higher than the price cap set by Western countries in 2022. This provides the Russian state with additional billions in revenue, which it allocates to funding the war in Ukraine.
Follow the Money: who profited from the old ships in the shadow fleet?
According to the investigation by Follow the Money, over one-third of the shadow fleet (230 ships), mostly old and worn-out tankers, previously belonged to owners from Western countries. The owners sold these ships at unusually high prices. Vessels that would otherwise have been scrapped since 2022, when the war in Ukraine began, have now generated over $6 (£4.8) billion in profits.
Although sanctions against this trade have recently expanded, little was done initially to prevent the sale of old tankers to the "shadow fleet." Europe is now facing the consequences: the war persists, obsolete ships are used for espionage and sabotage, and environmental disasters loom, the article reports.
The Kyiv School of Economics has published a list of all suspicious tankers used to transport Russian oil. For the study, Follow the Money and its media partners analysed information about their shipping routes and tanker prices from marine brokers' reports. Interviews were also conducted with numerous experts and industry insiders.
At the end of 2022, the G7 countries introduced a price cap on Russian oil. The aim was to limit Russia's income by preventing it from selling oil and petroleum products above this price.
Follow the Money is conducting an investigative project on the shadow fleet in collaboration with 13 other editorial teams and 40 journalists worldwide.
