UPDATED: Illuminating Russia’s Shadow Fleet

Nearly two and a half years after Russia invaded Ukraine, missiles are still sinking vessels in the Black Sea, deceptive shipping practices (DSPs) continue to evolve, and new shipping sanctions are issued. The emergence of the “shadow fleet” has also been an important development…

The shadow fleet (or alternatively “dark fleet”) phenomenon has drawn a great deal of attention from the mainstream media since the outbreak of Russia’s invasion of Ukraine, but it will be valuable to go deeper on this subject. 

“‘Shadow fleet’ has become a buzzword — widely used by the media and within the maritime industry, but poorly defined and ambiguous,” said Ami Daniel, Windward Co-Founder and CEO. “Windward’s Maritime AI™ insights conclusively demonstrate that it will be more actionable and efficient for organizations to focus on the risky gray and dark fleets. This conceptual framework empowers organizations to better predict risk, so they can continue engaging in wet cargo trades, understand the supply and demand balance, and negotiate freight deals in a more informed fashion.” 

Windward’s Maritime AI™ platform identified a three-tiered system of vessels to paint a more accurate picture of Russian oil smuggling: 

• Cleared fleet – tankers not exhibiting any suspicious conduct, such as flag hopping or irregular ownership structure. It is important to be able to quickly identify these vessels, so that maritime organizations are not paralyzed by false positives and indecision that will further hamper global trade. 
• Gray fleet – a completely new phenomenon evolving from the Russia war. Overseas companies have been quickly established following the outbreak of the war, to obscure vessel origins and ownership, and to appear law-abiding/non-sanctioned. This fleet is described as “gray” because it is difficult to determine legality and sanctions compliance in many cases. A significant number of these vessels also switch flags (“flag hopping”) frequently. Windward has identified over 1,000 gray vessels around the world. 
• Dark fleet – this fleet often utilizes “dark activities” (the intentional disabling of the automatic identification system) to move wet cargo, along with other deceptive shipping practices (DSPs), such as ID and location tampering. Windward has identified approximately 1,300 dark fleet vessels. 

The gray and dark fleets are both composed of vessels that pose a legitimate risk due to often hard-to-detect activities related to attempts to smuggle wet cargo from Russia. This sets up a cleared vs. risky dynamic for maritime organizations.

Vortexa’s technology discovered that the gray fleet carried around 1.4 million crude oil barrels per day (M-BPD) each month post-invasion (March 2022-April 2024), which translates to a 111 percent increase when compared to pre-invasion levels. For the same criteria and timeframes, the dark fleet crude oil flow increased by 19 percent. These volumes are attributed to Russian crude oil only.

This Windward and Vortexa joint report will shine a light on the different tanker fleets currently in use, explain how they are classified, offer proprietary and exclusive data on the trade flows of Russian oil, and supply insights to provide maritime organizations with a conceptual framework to clear business faster, while avoiding financial and reputational risk. 

The report includes a breakdown of the top three dark and gray subclasses, to show how often oil/chemical tankers, crude oil tankers, and oil product tankers are used by these fleets, respectively.

Perhaps the best news is that 75 percent of vessels are from the cleared fleet, meaning that with the right artificial intelligence (AI) technology, global trade can be easily enabled. The report explains which flags to be on the lookout for and offers a detailed breakdown of the origins and destinations of smuggled Russian oil, by country.

The shadow/dark fleet was popularly estimated to number around 600 vessels earlier in the war, with mysterious ownership designed to obscure their transport of sanctioned Russian oil/wet cargo since the start of the Russian war. 

Windward’s comprehensive one-year and two-year reports on the impact of Russia’s war offers useful background on the West’s oil ban and price cap regulations. As with previously sanctioned regimes, it quickly became apparent that some actors would work diligently to circumvent the West’s efforts to constrain Russia. Russia and affiliated organizations adopted several of the deceptive shipping practices used by other sanctioned regimes, such as Iran and Venezuela. This resulted in many vessels that were previously uninvolved in smuggling getting flagged. 

The price cap, with its different tiers, has influenced the types of DSPs that began to occur more frequently. As buyers changed, with a major shift from Europe to India, China, and Turkey, the makeup of the required fleet to transfer Russian crude was also altered. 

To distinguish between the different types of vessels and activities now occurring, many within the maritime industry have started to use the terms “dark fleet” or “shadow fleet” (often interchangeably), yet these definitions are ambiguous, because sources usually only offer generic or vague definitions. 

Pre-war, the world was used to clear definitions of vessels: ships engaged in illicit activities/sanctioned ships, and law-abiding vessels. The Iranian and Venezuela-related “shadow fleets” were relatively small and did not significantly impact non-sanctioned trade. 

With the emergence of regulations and the price cap on Russian crude oil and oil products, there are now effectively three groups competing for charterers’ deals. Not all of them would be relevant to all charterers and all deals. 

This market reorganization impacts the commercial market in three ways: 

• Supply and demand: when positioning vessels for future trade (next month + ), traders and operators take into consideration the expected supply and demand balance. 

• Local deals: while competing for a specific deal, operators consider competing vessels, which impacts pricing and negotiation. 

• Compliance fears: traders and operators remain worried about inadvertently trading with a sanctioned vessel or organization. 

Viewing the current Russian maritime landscape through the prism of a tiered system, and detailing these tiers and their sub-categories, has offered organizations a framework to clear legitimate business deals faster, facilitating global trade, while not unintentionally supporting Russia’s invasion. 

The tiers: 

Cleared Fleet

These are tankers not exhibiting any suspicious static conduct, such as flag hopping or irregular ownership structure. Behaviorally, these vessels do not indicate any participation in deceptive shipping practices, such as going dark for periods of time that might suggest involvement in a commodity trade. An additional indication of this fleet’s legitimacy is the areas in which they operate and the level of regulation of the ports and terminals they frequently call. 

Gray Fleet

The oil ban and price cap imposed on Russian oil has led to a major shift in the oil supply chain. The most notable of these changes is the identity of Russian crude and oil product importers. Excluding the countries that ban the import of Russian oil – including the U.S., UK, EU, Australia, and Japan – and the decline of Russian oil prices, has led to the emergence of other buyers. Countries such as China, India, Libya, and Turkey, have significantly increased their trade with Russia. This has led to the creation of a quasi-legal fleet working in parallel to the cleared fleet to carry out this trade. 

Windward’s Maritime AI™ platform utilizes a variety of behavioral and ownership-related indicators. These indicators include, but are not limited to, port calls, ship-to-ship operations, ownership and identity changes, first-time visits and more. We cover new areas of operation and ship-to-ship hubs along the way to the cargo’s final destination, enabling us to identify not only the vessels loading the oil in Russian terminals, but also other vessels further down the supply chain. 

Dark Fleet

These are the tankers carrying out clandestine trade of sanctioned commodities, using diverse methods of obfuscating their origins. This fleet utilizes a variety of DSPs, including both static and dynamic methodologies. These include dark activities, GNSS manipulation, and many more DSPs. 

The fleet is characterized by weak ownership structures and the use of multiple flags of convenience over short periods of time. The size of this fleet has fluctuated substantially with each new regulation published and even more so following the Russian oil ban and price caps. 

A deeper exploration of the data unearths some important trends and insights that will empower organizations throughout the maritime system to adopt more strategic decision-making and stay ahead of evolving deceptive shipping practices and masking techniques.  

Let’s start with the percentages of the different types of vessels involved in transporting wet cargo (as of May 2024).

This following exclusive data comes from Vortexa*. Windward and Vortexa established the industry’s first data sharing agreement for maritime cargo flow and risk factors. This has led to greater visibility into compliance and risk across the global tanker fleet.

Mary Melton, Freight Analyst at Vortexa, has illuminating statistics and insights on the amounts of oil being transported and the potential destinations. 

“The involvement of the gray and dark fleets with Russian cargos is quite evident following the invasion of Ukraine. According to our data, the gray fleet has carried around 1.4 million crude oil barrels per day (M-BPD) each month post-invasion, which translates to a 111 percent increase when compared to pre-invasion levels. Similarly, the same comparison for the dark fleet is estimated at a smaller, but nevertheless considerable, 19 percent.״

*The numbers provided by Vortexa excluded the following tanker populations: 

• In-land tankers

• Tankers below 5,000 DWT

• CPC and KEBCO blends (non-Russia grades)

“The volume of Russian cargoes carried by the gray fleet has increased 79 percent following the Russian invasion of Ukraine. For the dark fleet, Russian cargo lifts have increased 30 percent compared to the pre-invasion period.

Since increased sanctions enforcement by the US in October 2023, the gray and dark fleets are being increasingly employed to lift Russian cargoes. Since October 2023, gray fleet involvement in lifting Russian cargoes is 22 percent higher compared to the entire period since the Russian invasion. Dark fleet involvement is marginally higher during this same comparison period.

In terms of destinations for these vessels, there has not been much change since new trading patterns established themselves post-invasion and since the EU price cap was put into place. India and China remain Russia’s top crude buyers, while Russian diesel goes to Turkey, Brazil and to a lesser extent North and West Africa,” said Mary Melton, Freight Analyst, Vortexa.

Gray Fleet Top 10 Destinations