Trump Considers Sanctions on Russia's "Shadow Fleet" of Oil Tankers

Strategic Insights -

US President Donald Trump is reportedly considering additional sanctions on Russia's "shadow fleet" of oil tankers if President Vladimir Putin does not agree to a ceasefire in Ukraine by Friday. This move would mark the first time the US has imposed sanctions on Moscow since Trump returned to the White House in January. The shadow fleet, comprising vessels whose ownership is hidden and which avoid using services from western companies, has enabled Russia to ship oil and evade western restrictions imposed after the 2022 full-scale invasion of Ukraine. Proceeds from these crude exports have helped to finance the conflict.

Key Takeaways:

  • The US is considering imposing sanctions on Russia's "shadow fleet" of oil tankers if President Putin does not agree to a ceasefire in Ukraine by Friday.
  • The shadow fleet comprises vessels whose ownership is hidden and which avoid using services from western companies, allowing Russia to ship oil and evade western restrictions.
  • The fleet has enabled Russia to export oil above a cap of $60 a barrel, mainly to China and India, generating proceeds that have helped to finance the conflict.
  • The US has not imposed sanctions on Russia since Trump returned to the White House in January.
  • The EU has already placed more than 415 ships under sanctions, including over 100 ships last month, under the terms of the sanctions, western companies are prohibited from buying seaborne oil priced above the cap.
  • Trump's special envoy, Steve Witkoff, is expected to return from Moscow today, and the president will likely decide on action against Moscow based on what Witkoff brings back.
  • The US has been clear that there will be biting sanctions if Putin does not agree to end the war, but the specifics have not been disclosed.

Statistics:

  • The EU has placed 415 ships under sanctions, including over 100 ships last month.
  • The EU has identified more than 100 ships in the shadow fleet to date.
  • Crude oil exports via the shadow fleet have generated proceeds that have helped to finance the conflict.
  • The cap on seaborne oil prices set by the EU is $60 a barrel.

Sources:

  • Kevin Book, managing director of research at ClearView Energy Partners
  • Benjamin Hilgenstock, head of macroeconomic research and strategy at the Kyiv School of Economics Institute
  • Anna Kelly, White House deputy press secretary
  • State-owned Russian news agency Tass
  • GlobeNewswire