White House Plans to Sanction 100 More Russian Dark Fleet Tankers
Final Sanctions on Russia's Shadow Fleet
The Biden administration is making a decisive move in its final days by targeting Russia’s “shadow fleet” of tankers involved in the energy trade. According to two officials who spoke to Reuters, the U.S. Treasury plans to impose sanctions on a significant number of these vessels. Currently, over 200 Russian ships are already on the U.S. blacklist. This new round of sanctions could expand that list considerably. The goal is to disrupt the flow of Russian oil exports, particularly those priced above the G7’s $60 per barrel cap. This cap was designed to limit Russia’s revenue while maintaining global energy stability. However, the effectiveness of this strategy is now in question as Russia has found ways to circumvent these restrictions.
Targeting the Shadow Fleet
The upcoming sanctions will focus on tankers from a lightly-regulated fleet that now transports most of Russia’s oil exports. These vessels are often older than 15 years and are flagged in jurisdictions with minimal oversight, such as Gabon and the Cook Islands. Reports indicate that Russia’s shadow fleet has grown to approximately 600 ships, including Medium Range (MR), Long Range (LR), and Aframax tankers. These ships are primarily used for operations in the Baltic Sea. According to Platts, more than 80% of all Russian oil is now transported by these sanctions-evading tankers. This raises serious concerns about the effectiveness of the G7 price cap, as Russian oil exports have not only continued but have also thrived under these conditions.
The U.S. has had some success in combating oil trafficking through targeted sanctions on specific vessels. Engaging in transactions with a U.S.-sanctioned ship can expose service providers to severe penalties from the Treasury. This risk has deterred many banks, suppliers, and terminal operators from engaging with these vessels. However, the Biden administration is preparing to leverage this strategy one last time by imposing sanctions on over 100 tankers, along with various oil companies and insurance firms linked to the Russian energy sector. This final push aims to tighten the noose around Russia’s oil trade before the transition to the next administration.
Uncertain Future of Sanctions
The future of these sanctions remains uncertain, particularly with the upcoming presidential election. President-elect Donald Trump has previously expressed skepticism about the effectiveness of sanctions. In July 2024, he stated that sanctions could isolate the U.S. from its allies and suggested a more lenient approach toward Russia. This ambivalence raises concerns among America’s European allies, who are closely monitoring the situation. If a Trump presidency were to reverse U.S. sanctions on Russia, European nations would need to adopt a more robust enforcement strategy. Analyst Tom Keatinge from the Royal United Services Institute emphasized that Europe would no longer be able to rely on U.S. leadership in sanctions enforcement.
As the Biden administration prepares to implement these final sanctions, the implications for global energy markets and international relations are significant. The effectiveness of the G7 price cap and the resilience of Russia’s shadow fleet will be tested in the coming months. The outcome will depend not only on the actions taken by the current administration but also on the policies of the next one.
