BRUSSELS, July 8 — Against this backdrop of grinding war in Ukraine, the transatlantic machinery of sanctions has increasingly turned its focus to a phantom adversary: Russia’s so-called shadow fleet, a sprawling network of aging tankers and opaque corporate structures that keeps Kremlin oil revenues flowing despite Western restrictions. The United States and the European Union have imposed multiple sanctions packages targeting this fleet since the full-scale invasion of Ukraine on February 24, 2022.
The U.S. Treasury’s Office of Foreign Assets Control, known as OFAC, has designated over 100 vessels and entities involved in the operation, including shipping companies and insurance providers. These designations aim to starve the network of the legitimate financial and logistical services it requires to move Russian crude to global buyers.
In the corridors of European policymaking, the EU’s 12th sanctions package, adopted in December 2023, marked a significant tightening. It included specific measures to crack down on ship-to-ship transfers, a common tactic used by Russian exporters to obscure the origin of cargoes. The package also introduced a requirement for tankers to provide proof of insurance, a move designed to expose uninsured or underinsured vessels operating outside normal maritime protocols.
At the heart of the economic campaign lies the G7 price cap of $60 per barrel, implemented in December 2022. The mechanism is elegant in theory: it allows Western insurers and shipping services to handle Russian oil only if the cargo is purchased at or below the cap, thereby reducing Moscow’s revenue while maintaining global supply and avoiding a price spike.
What is at stake is nothing less than the financial fuel for Russia’s war machine. Yet enforcement remains a persistent challenge. The shadow fleet’s reliance on flags of convenience—registry in jurisdictions with lax oversight—and its use of deceptive practices have made tracking and interdiction difficult.
The wider picture includes pressure on major importers of Russian crude. The U.S. has pressed countries such as India and China, both of which have significantly increased their purchases of discounted Russian oil since the invasion, to comply with the price cap. Separately, Ukraine’s military strikes against Russian energy infrastructure and shadow fleet assets have been welcomed by Western officials as a legitimate military tactic.
These operations, however, also raise concerns about escalation and the risk of environmental damage from damaged tankers. What to watch next is whether the next tranche of sanctions will target the remaining loopholes.
