UK lawmakers issue warning on Russia's suspected use of 'Shadow' tankers

• The warning comes after the G7, EU, and Australia imposed an unprecedented price cap on Russian oil.
• The committee urges the UK and its allies to maintain sanctions and military support for Ukraine.
• The Kyiv School of Economics (KSE) reports that 179 loaded Russian shadow fleet tankers.

A watchdog committee of British lawmakers issued a warning on Wednesday, stating that there is "growing evidence" of Russia using "shadow tanker fleets" to evade a Western oil price cap. Urging Britain and its allies to maintain sanctions and military support for Ukraine for "as long as it takes," the panel from the unelected upper House of Lords called for "decisive action" on the issue.

This development comes just over a year after the G7, European Union, and Australia imposed an unprecedented price cap on Russian oil, aiming to deprive President Vladimir Putin of much-needed revenue while ensuring a continued supply to the global market.

While initially successful, Moscow rendered the $60 per barrel price ceiling on Russian oil ineffective by finding new buyers and employing new tankers for its exports. Recent assessments indicate that Moscow has diminished its reliance on Western shipping services. Instead, it evades the curb by establishing so-called shadow fleets of tankers, purchasing old ships, and providing its insurance services.

“We are concerned at the growing evidence that Russia has been able to circumvent sanctions, including through third states and uninsured shadow tanker fleets,” the Lords’ European Affairs Committee said in a new report.

"This is an issue requiring decisive action by the UK and its allies," it added, urging the government to provide "specific examples" of enforcement action.

The EU, G7 member states, and Australia prohibit companies within their jurisdictions from offering services facilitating maritime transport, including insurance, for oil exceeding the specified price.

However, the Kyiv School of Economics (KSE) is the latest entity to underscore the extent to which Russia can now circumvent this mechanism.

In its December "Russian oil tracker" report released earlier this month, the KSE estimated that "179 loaded Russian shadow fleet tankers left Russian ports in November 2023." It noted that around 70 percent of these vessels were constructed more than 15 years ago.

In October 2023, the KSE reported that the shadow fleet facilitated exports of approximately 2.3 million barrels per day of crude oil and 800,000 barrels per day of petroleum products.

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