Russia vows stern retaliation against West's navigation curbs

Politico recently reported on potential moves by Western nations to restrict the navigation of Russia's so-called "shadow fleet." This term refers to vessels that officially operate under various national flags but are, in reality, controlled by Russia, enabling it to circumvent Western sanctions and transport embargoed oil. According to Politico, the new Western strategy involves barring ships managed by Russia from navigating through the straits near Denmark - namely, Oresund, Great Belt, Fehmarn Belt, and Little Belt - citing environmental concerns. Additionally, Western entities plan to employ the MARSUR network to enhance the sharing of important information like ship positions or identification data, alongside sending messages and images to aid in identifying these vessels.

This tightening control over the aforementioned straits could significantly impact Putin's oil trade. Russia's response to the initiative was swift. During a recent YouTube-broadcasted briefing, Maria Zakharova addressed the Politico report, stressing that the Copenhagen treaty of 1857 and the UN Convention on the Law of the Sea ensure free passage for all ships through these straits. She contended that any efforts to modify international law in this regard are wholly unacceptable.

The issue of the "shadow fleet" has also caught the attention of the International Group of P&I Clubs, which highlighted the increase in vessels joining the shadow fleet for trading parallel to the sanctioned routes, following the imposition of a price cap on Russian oil.

December 2023 saw the G7 nations announce heightened measures to enforce the $60 per barrel price cap on Russian oil. These enhanced sanctions and restrictions against shipping entities transporting Russian resources appear to have prompted an increase in the usage of the "shadow fleet" for oil transportation, as noted by "Kommersant." Despite attempts by the West to impose price limitations on crude oil, Russia has navigated these barriers through the shadow fleet, comprising uninsured oil tankers with concealed ownership. Bloomberg reports that this strategy allows Russia to sell oil beyond the imposed limit, thereby boosting its monthly earnings from raw materials exports, even surpassing pre-Ukraine war figures.

Approximately 45% of Russian hydrocarbons are shipped by the shadow fleet, with a significant portion finding its way into Europe via Libya, hence fostering a gray market for oil. However, expert Igor Yushkov, quoted by kommersant.ru, suggests that the actual scale of this operation might be smaller, with these ships ferrying around 2.5 million barrels a day, or one-quarter of Russia's maritime oil exports. Yushkov also points out that since the price cap's introduction, Western companies have entirely ceased transporting Russian oil due to sanction fears, rendering the idea of re-engaging international carriers with this trade as impractical.