Putin’s dark fleet

This black moonshine lubricates the black economy, selling below the international market rate which touched $80 a barrel in October. The beggars in the Kremlin can’t be choosers, not that they could care less: this trade has put billions into their war chest.

An oil tanker is one of the biggest man-made structures on Earth – and getting bigger. Maritime architecture has supersized, in inverse proportion to the construction permitted in many places on dry land, which is increasingly crabbed and constrained. You can’t get permission for your high-rise hotel? No problem, just build it at sea instead: a modern cruise liner can accommodate as many holidaymakers as an entire resort. 

The largest oil tankers at sea today have a capacity of 550,000 DWT (dead weight tonnage), or half a million tons, fully loaded. As big as these leviathans are, the sea is infinitely bigger and getting bigger all the time, as water levels rise.  It’s vast, impenetrable and hostile. Few environments are capable of bringing out the good and bad in people like the sea. Incalculable tracts of it are beyond the law. The world has no maritime police force, and charterers and crews have taken advantage of that for almost as long as there has been shipping. But now Putin has weaponised it as never before. 

Six hundred tankers carrying Russian oil passed through the Gulf of Finland in the first six months of 2024 and half of them were off the books. Many of those vessels were on an international blacklist, meaning they were classed as ships “for repair or scrap”. No reputable underwriter had taken them on. Insurers like Lloyd’s of London cannot offer cover for ships carrying Russian oil unless it is sold in compliance with the price cap. 

If the ships were insured at all, it was in Russia, and those guarantees are not worth the paper they’re printed on. Since sanctions were imposed in December 2022, Moscow has spent up to $10bn mustering 350 or more dark ships which move about 4 million barrels of oil a day, 1.5 million of them through the Baltic.

The ownership and management of this shadow fleet are unclear. Opaque offshore structures such as shell companies make it hard to pin down how and where the ships were acquired, or who owns them. It’s been reported that Lukoil, Russia’s second largest energy company, provided funds to operate more than 20 tankers through an associated company in Dubai. There is no suggestion that laws were broken. Although the United States imposed sanctions on Lukoil ten years ago, the Dubai company itself is not subject to such measures. Nor are Dubai-based firms required to comply with the west’s restrictions, provided that they don’t receive funding from G7 countries.

The fleet sails under flags of convenience, including the pennants of Antigua and Barbuda, Barbados, the Cook Islands, Guyana, Guinea-Bissau, Honduras, San Marino and Sierra Leone: the proverbial sunny places for shady people. More than 100 tankers joined the registries of these dominions this year, according to Michelle Wiese Bockmann of Lloyds List Intelligence, a sister company of Lloyds List, which analyses seaborne trade. The Cook Islands alone proudly doubled its fleet in just seven months, adding 50 tankers of 20,000 DWT or more.

“We haven’t seen these vessels before,” says Mikko Hirvi, deputy commander of the Finnish Coastguard, part of the country’s border guard. “They’re older than the ones we’re used to, and the competence of the crews in Baltic conditions, especially during winter and the ice navigation period, is unknown.” A genial, balding man in the inky blue fatigues of the coastguard, Hirvi tells me that many of the tankers are not “ice class”, meaning that they aren’t approved for navigating sea ice. In the deep freeze of a typical Nordic winter, the Gulf of Finland is icebound. 

On February 12^th 2024, for example, a brutally cold day, ice covered 135,000 square kilometres of the gulf. Ships travelling from St Petersburg had to batter their way through 186 nautical miles of ice, of which 120 were “thicker ice”, in the terminology of scientists at the Finnish Meteorological Institute. The thought of groaning, rivet-popping bathtubs filled with oil negotiating a frozen sea with little or no relevant experience on the bridge gives men like Hirvi sleepless nights. 

“There are some vessels that are familiar to us, but they’ve changed their flags and are not necessarily insured by the big maritime insurance companies,” he says. “In the case of an oil spill, this could have a serious effect, since it is possible that the familiar ‘polluter pays’ rule cannot be implemented. The risk of an oil spill, and of deploying maritime search and rescue, has increased in the Gulf in the past two years.” 

A catastrophic breach of a tanker’s hull in the Baltic wouldn’t altogether suit the Kremlin – there are the lost millions in revenue to consider – but if a tragic accident were to happen, it’s not entirely inconsistent with Putin’s playbook of disrupting western allies on his borders. The shadow fleet is disavowed, deniable. Hirvi and his men can’t lay a finger on the rust-bucket convoys. “We don’t have powers for inspecting, boarding, interfering or something like that,” he admits.

The Finns want the EU to send a ship that is capable of responding to an oil spill in icy conditions into the northern Gulf of Finland. That would put it close to Russia’s oil-exporting ports of Ust-Luga and Primorsk, both of which are within a 200 mile radius of Helsinki. 

This isn’t a drill. A shadow fleet merchantman, Ceres I, was involved in an accident earlier this year, in Malaysian waters. That ship collided with the tanker Hafnia and both burst into flames. The crews had to be rescued and at least two sailors were hospitalised. “The crews of these ships are marginalised people, often from India and the Philippines, making about 800 dollars on these shitty old ships,” says Wiese Bockmann. “They might have no idea that they’re in the dark fleet.” The crash produced an oil spill covering about 17 square kilometres (6.5 square miles). The 23-year-old Ceres I, which was sailing under the flag of São Tomé and Príncipe, turned off its tracking system and fled the scene like a panicking motorist with no insurance.

Technology can put eyes in the sky over vessels of interest. The Royal Navy was flying drones above the Red Sea a year ago after the Houthis began firing on shipping. But costs and logistics, as well as brute geography, are limiting factors. And the shadow fleet has become adept at giving pursuers the slip, helped by the Russians, who are accused of jamming GPS signals. The disruption has become so serious in Finland that the national airline Finnair suspended flights to Tartu, Estonia, for a month, after two of its aircraft had to turn back to Helsinki. Wiese Bockmann says shadow fleet ships regularly use the trick pulled by Ceres I of switching off their Automatic Identification System. Rather more crudely, they also paint out any identifying signage on hulls. They sometimes offload their cargoes onto other ships while at sea, further disguising the origins of the oil. “A dozen or so of the dark fleet pass through the English Channel every 24 hours. They have the right of innocent passage, as it’s called, and they can’t be stopped,” says Wiese Bockmann. “It’s an accident waiting to happen.”

There are signs that western powers are waking up to the big hole that Russia’s fugitive traders are ploughing through their sanctions. The British government announced in September that it was taking measures against 10 named ships in the dark fleet; three of them alone have transported oil valued at £5bn since the invasion of Ukraine. It’s not certain how much of an effect this will have. The ships are now prohibited from entering a UK port and will be denied access to the UK Ship Register, privileges which these dubious freighters can never seriously have hoped to enjoy.

Helsinki Cathedral, white as a whale bone, overlooks Senate Square, a quad of eighteenth-century government buildings close to the harbour. Rising over their rooftops is the shark’s fin of an ocean-going funnel. The smokestack belongs to a pneumatic cruise liner, in port while her passengers spend time ashore. But of the shadow fleet, there is nothing to see and nothing to hear.