Officials announced that European nations are tightening restrictions on Russia’s “shadow fleet” of ageing oil tankers by requiring proof of adequate accident insurance. Ships unable to provide sufficient documentation may face sanctions as part of a new scheme agreed at a meeting of the Joint Expeditionary Force in Tallinn on Monday.
How the EU-27 Targets Shadow Fleet?
The plan targets vessels transiting key northern European waters including the Danish Straits and the Gulf of Finland. Participating countries— the UK, Denmark, Sweden, Poland, Finland, and Estonia—will request insurance details from ships navigating these routes. A diplomat familiar with the plan said that ships that lack adequate coverage or refuse to comply could be added to future sanction lists.
What is Behind the Initiative?
The initiative builds on G7 sanctions, prohibiting Western insurers from covering tankers breaching the $60-per-barrel oil price cap. The cap aims to limit Moscow’s oil revenues amid the ongoing war in Ukraine. Russia has relied on a “shadow fleet” of older vessels with concealed ownership and management structures in response. Many operate without reliable accident insurance, posing significant environmental and safety risks.
Latvian Foreign Minister Baiba Braže emphasised the urgency of the measure, describing it as a way to make their operations “impossible.”
Highlighting the scale of the issue, noting that 2,000 ships pass through the Baltic Sea daily, Braže emphasised the security and environmental risk of such crossings.
While adding tankers to the EU sanctions list requires unanimous approval from all 27 member states, Braže argued that incomplete or inadequate insurance information would be evidence of bad faith.
Environmental & Security Risks
Concerns over underinsured vessels have grown, mainly due to the potential cost of oil spills. In March, reports by the Financial Times and Denmark-based watchdog Danwatch revealed that Ingosstrakh, a Russian insurer, provided coverage to shadow fleet vessels—insurance that could be voided if shipments breached the price cap.
The EU has already begun cracking down on irregular shipping practices. Since June, its sanctions framework has included “high-risk shipping” as grounds for listing vessels, which aligns with International Maritime Organization (IMO) standards for liability insurance.
“This targeted approach by the EU increases the cost for Russia to use such vessels,” the European Commission said in a statement, adding that it would “continue to closely monitor” how the fleet sought to evade Western measures.
Some nations have taken independent steps to address the issue. In October, the UK began challenging tankers in the English Channel about their insurance status, while Estonia has requested documentation from more than 200 vessels since June.
Countries Raise the Game
The dangers posed by the shadow fleet are not hypothetical. Evidence submitted to a UK select committee by the Kyiv School of Economics and the non-profit group State Capture revealed that shadow fleet tankers were involved in nearly 30 accidents between 2022 and 2023.
KSE data further shows that over 90 million barrels of Russian oil passed through northern European waters monthly in early 2024, with half of Russia’s seaborne exports originating in the Baltic.
Growing Risks & Sanctions
Maritime ships sanctioned by Western states, namely the US, EU, and UK, face severe operational challenges. On Monday, the EU added 52 more vessels to its list of ships banned from EU ports and denied services by EU-based companies. The European Commission stated that this “targeted approach” increases Russia’s financial burden for operating such vessels and reiterated it’s commitment to monitoring sanction evasion.
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