A “ghost fleet” allows a country under sanctions to bypass price caps and financial restrictions imposed by Western nations. The term, also called “grey fleet” or “black fleet,” is used by the European Union to describe oil tankers carrying crude or refined petroleum from sanctioned countries such as Russia, formerly Venezuela and Iran. These vessels operate outside traditional Western financial, insurance, and maritime frameworks.
A Fleet Born After Sanctions Tighten
The specific Russian ghost fleet emerged in late 2022 following EU bans on maritime crude transport and later restrictions on refined products. To prevent global energy prices from rising sharply while limiting Moscow’s profits, the G7 and EU introduced a price cap. This policy bars Western companies from providing insurance or financing for oil sold above a set price, while still allowing nations like China and India to purchase barrels.
In response, Russia developed an independent fleet to move oil priced above the cap, avoiding Western-backed services entirely. Most of these ships are older, often over 15 years old, bought secondhand. To obscure ownership, they are frequently registered under single-ship companies in jurisdictions such as the Marshall Islands, Hong Kong, or the United Arab Emirates. These registration practices allow opaque financial structures to hide beneficial ownership from regulators and satellite tracking systems.
Ships Fly Under Fake Flags
Many tankers use low-cost registries like those of the Cook Islands and lack coverage from the International Group of P&I Clubs, the main insurers in global shipping. Reports indicate that several of these vessels operate under fraudulent flags to evade detection.
Estimates of the fleet vary widely, ranging from 600 sanctioned ships to at least 1,400 vessels in the broader network. Recent data suggests more than half of Russia’s seaborne oil is transported by these flagged tankers, while a significant portion still moves via ships insured by the G7 and sold below the price cap. The majority heads eastward, with India and China as the top destinations. The difficulty in quantifying the exact number of active vessels stems from the dynamic nature of ship registrations and the use of shell companies that obscure real-time fleet movements.
Triple Threat to Stability
To counter the ghost fleet, the EU has taken a multi-pronged approach. It has blacklisted certain vessels to block port access, urged flag states to revoke registration, and deployed naval missions like Operation Irini to inspect suspicious ships. These inspections involve boarding vessels suspected of carrying sanctioned oil, verifying cargo manifests, and cross-referencing shipping data with satellite imagery.
Legal Hurdles Limit Impact
However, these efforts face legal obstacles. The price caps are not UN sanctions and do not bind non-Western buyers. Russia has condemned the maritime interceptions as piracy and threatened retaliation.