The maritime industry is facing a growing concern as the number of vessels hit by sanctions has exceeded 1,000, with over 800 of these ships lacking confirmed insurance. Data from S&P Global Market Intelligence indicates that the average age of sanctioned ships is 21 years, which is eight years older than the global average. This has raised alarms about the potential for numerous costly environmental disasters stemming from the vast shadow fleet.

Although the growth of the grey fleet has slowed down, it is still expanding by approximately 10 tankers per month, as reported by brokers BRS. Vintage tankers, with nearly two-thirds of them carrying Iranian, Venezuelan, or Russian cargoes last year, are a significant component of this shadow fleet, according to estimates from broker Gibson.

Allianz, a global insurer, highlighted in its 2024 shipping report the challenges posed by the shadow fleet. Despite efforts to curb these vessels, the number of tankers continues to rise, leading to a rise in grounding and collision incidents. The situation has prompted the UK and several north European countries to challenge the insurance coverage of vessels traveling from Russia through the Baltic and along the English Channel.

Last year, the Danish government spearheaded discussions with neighboring countries to explore ways to prevent some of Russia’s shadow fleet from transiting the Baltic Sea. This initiative gained importance following a collision involving a laden Russian shadow tanker in March last year. Approximately one-third of Russia’s seaborne oil exports pass through the Danish straits, with a significant number of these ships having unknown insurance.

Craig Kennedy, from the Navigating Russia substack, revealed that around 175 tankers laden with Russian oil traverse the Baltic each month. He proposed implementing insurance verification programs in the Baltic and potentially the Aegean to limit Russia’s use of shadow tankers for oil exports. By restricting the use of mainstream tankers, this approach could expose Russia’s export revenues to price cap constraints.

One notable incident involving an uninsured shadow aframax vessel called the Pablo, which exploded off Malaysia, was highlighted as Splash’s image of the year 2023. This serves as a stark reminder of the risks associated with the unchecked proliferation of sanctioned vessels in the maritime industry.

The collaboration between the UK and its European counterparts to address the issue of insurance coverage for vessels transiting key maritime routes underscores the importance of international cooperation in tackling the challenges posed by the shadow fleet. By implementing stringent measures to verify insurance coverage, countries can mitigate the risks of environmental disasters and maritime incidents associated with sanctioned vessels.

As the maritime industry grapples with the growing threat posed by the shadow fleet, it is crucial for stakeholders to work together to enforce regulations and monitor the movement of sanctioned vessels. By taking proactive steps to address the issue of uninsured and sanctioned ships, the industry can safeguard against potential environmental catastrophes and protect the integrity of global trade routes.

In conclusion, the escalating number of vessels hit by sanctions and lacking confirmed insurance underscores the urgent need for coordinated efforts to address the challenges posed by the shadow fleet. By implementing robust measures to verify insurance coverage and restrict the use of shadow tankers, the maritime industry can mitigate the risks associated with sanctioned vessels and safeguard against costly environmental disasters.