Jeanne-Mây Desurmont | 24 July 2024

Summary

• Since the Russian invasion of Ukraine in 2022, several international sanctions banned trading a range of Russian goods, including a cap on the price of Russian oil, thus Russian companies can’t sell oil less than $60 per barrel. Ultimately those sanctions aim to curtail Russian revenues from oil exports. 

• Russia is deploying and operating a fleet of vessels under the radar to bypass international sanctions and transport oil. While “ghost fleets” are not new, the scale of the Russian operations is making the maritime space less safe and secure. 

• Ghost fleets are adding pressure to coastal states. They represent potential environmental and economic threats mainly because of their old age, lack of insurance, and the opacity around their ownership.

As a response to the Russian invasion of Ukraine in February 2022, several states including the U.S. and EU member states imposed economic sanctions against Russia. Sanctions on goods aim to reduce Russian revenues, targeting the main source of Russian export: oil. By enforcing a cap on oil prices, it is legally difficult for Russian companies to sell their oil at less than $60 per barrel. Similarly, western maritime insurers cannot insure oil shipments from Russia without risking sanctions. To profit from this lucrative market, oil and insurance companies, alongside Russia, need to turn to ghost or shadow vessels to keep transporting and selling oil on the world’s markets. 

In short, a ghost fleet consists of old vessels without proper insurance, undetermined ownership and sailing under a convenience flag. Used by Iran, North Korea and Venezuela to counter Western sanctions, the scale of the Russian ghost fleet is unprecedented with an estimate of 1.400 ships at sea. The primary goal of ghost fleets is to transport prohibited goods under the radar and sell them by masking their provenance. Ghost fleets usually conceal their activities by turning off the Automatic Identification System, which transmits a vessel’s position, especially to other ships, or by conducting ship-to-ship transfers. The latter method involves a meeting between two vessels in the high seas so they can discreetly transfer their commodity from one to the other. Ultimately, ship-to-ship transfers are used to launder oil, fish or other goods at sea and blur the actual origin of a shipment. 

Beyond breaching international sanctions and maritime conventions, ghost fleets are increasing the probability of incidents at sea, endangering other seafarers and the environment. By turning off their AIS, dark ships navigate undetected by the radars and monitor satellites,  meaning that they are also undetectable by other vessels at sea. This greatly increases the risk of collisions and incidents between two vessels. A collision with an oil tanker is endangering the crew of both boats which may subsequently result in oil spills, threatening environmental security. The old age of ghost oil tankers is also increasing the probability of technical issues that can lead to malfunctions of the engines - and, in the worst-case scenario,  an explosion. Ship-to-ship transfers in themselves are also dangerous practice, especially when occurring in the high seas. 

Furthermore,  the lack of adequate insurance is also economically harmful to other vessels and coastal nations. Suppose an incident occurs between a ghost, an uninsured vessel without an identifiable owner, and a vessel complying with international rules. In that case, the insurance of the latter has to cover the costs of the accident. This includes the costs of rescuing the crew and vessel, repairs, and cleaning up oil spills. In the same way, if two ghost ships collide or if an incident only involves a ghost vessel, the burden falls on the country in whose EEZ or territorial waters the incident happens. For example, in May 2023, a fire started on the Pablo, a Gabon-flagged tanker in the EEZ of Malaysia. Then, Malaysia had to rescue the crew and extinguish the fire. In other words, if two ghost ships collided and polluted the English Channel, taxpayers from France and England would have to share the costs without expecting the participation of an insurer. Analysts counted approximately 40 incidents involving ghost vessels in 2023 only and they are expecting a higher number with the expansion of the shadow fleets. 

Moroever, the primary victims of ghost fleets are the coastal states that don’t profit from the dark fleets but whose waters are used by those vessels as they will have to compensate for the lack of insurance. In the case of the Russian shadow vessels, states like Norway and Denmark are more vulnerable to incidents in their EEZs. In addition, those states have very limited options to block ghost vessels in their waters. As states follow the UN Convention on the Law of the Sea (UNCLOS), they have to uphold the right of innocent passage, and arresting and escorting a vessel could lead to Russian retaliations. Even if the authorities could prove the origin of the oil, owners would be as invisible as their ships, making it impossible for any attempt to prosecute individuals. Signatories of the UNCLOS are also responsible for searching and rescuing the crew at sea as well as cleaning the oil spills. 

The only action a coastal state can take is to monitor and track the vessel fleet to understand their routes and design contingency plans. Albeit complicated, it is possible to track shadow vessels. First, one can track the age of the ships on the registries to spot suspiciously old vessels. Second, by using satellite imagery, one can observe ship-to-ship transfers by noticing two ships side by side in a static position. Then, the lack of transparency around ownership is also an indicator. Analysts can also track the journeys made under convenience flags, including flags from Liberia, Marshall Islands, Panama, Russia, and Gabon. 

This leads to an important question underlining the issue of ghost fleets: should they be considered grey zone warfare or mere maritime transportation tools? On the one hand, ghost fleets are on the lighter end of the grey-zone spectrum, given that it does not involve kinetic and aggressive measures. Additionally, the deployment of dark fleets is not related to any specific security issues at sea, such as maritime sovereignty claims or critical maritime infrastructures. On the other hand, some scholars argue that Russia is instrumentalising its dark fleets as its inherent vulnerabilities expose some states to economic pressure and harm. This perception is heightened by the high frequency of the shadow vessels crossing national waters. Moreover, ghost fleets are directly supporting Russia’s war effort against Ukraine as they provide a steady source of income despite the international sanctions. The use of dark vessels in grey zone warfare is also questioned as several media outlets have investigated the use of ghost ships to smuggle grain from occupied Ukraine from the Baltic Sea to the world’s markets. Similarly to oil laundering, ship-to-ship transfers allow Russia to mask the origin of its grain. In summary, while ghost fleets are arguably a grey-zone warfare tactic, they are certainly increasing insecurity at sea and adding pressure to coastal nations in an already tense European maritime space. This is alongside supporting Russia’s war expenses and breach of sanctions. 

Forecast

• Short-term

  • It is highly likely that Russia will continue to deploy ghost fleets as long as it remains under international sanctions concerning its exports. In the meanwhile, coastal states can monitor, track and record the dark vessels’s routes and their incidents to potentially demand reparations and compensation from Russia.

• Long-term

  • The phenomenon of ghost vessels is not  new, but the size of the Russian fleets is highlighting this obscure tactic to counter economic sanctions. It is also revealing the importance of the maritime space as a critical component of resource supply chains. Ghost fleets highlight how the ocean's opacity is essential, benefiting both transnational crime and sovereign states. On the other hand, the increasing efforts of investigating ghost fleets highlight the possible use of open-source intelligence to increase awareness and vigilance.