Planet Money - How Russia’s shadow fleet is sailing around oil sanctions

Episode Date: October 17, 2025

Bjarne Caesar Skinnerup works as a maritime pilot in the straits of Denmark. That means he’s used to seeing oil tankers. But after the start of the war in Ukraine, the tankers started getting weird. They were flying flags he’d never seen before. They were old, very old, though many had taken on new names. Something was off. He’d stumbled on a shadow fleet of hundreds of tankers ferrying sanctioned oil out of Russia … with near impunity. Today on the show, how those ships are transforming the global oil market and fueling the war in Ukraine. And why this all might be a financial and environmental disaster waiting to happen.Pre-order the Planet Money book and get a free gift. / Subscribe to Planet Money+Listen free: Apple Podcasts, Spotify, the NPR app or anywhere you get podcasts.Facebook / Instagram / TikTok / Our weekly Newsletter.This episode was hosted by Alexi Horowitz-Ghazi and Daniel Ackerman. It was produced by Willa Rubin and edited by Marianne McCune. It was fact-checked by Sierra Juarez and engineered by Kwesi Lee and Cena Loffredo. Alex Goldmark is our executive producer.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. Until a few years ago, Bjarney-Sesar Skinnerup always thought of his work as a ship pilot as straightforwardly good for the world, in his small way, protecting his stretch of the Danish coastline from environmental and financial catastrophe. His job, whether there is rain or shine or freezing Nordic sleet, is to suit up, get into a little boat

and motor out into the Straits of Denmark, the highly trafficked waters that connect the Baltic Sea to the rest of the world. Our job is to bring ships through dangerous waters. Bjarni will sidle up to, say, a giant cargo ship and scale a rope ladder, sometimes 20 or 30 feet long, up onto the deck. And for a few hours, he'll take control of the ship and guide it safely through this busy thoroughfare in the global economy.

His goal is to prevent the boat from, hitting another ship or running a ground. Are there any maritime nautical characters from literature, a pop culture that you identify with strongly? Are you more of a like a Popeye guy or like a Captain Haddock type? If I'm bad timbered, I am most likely like Captain Haddock, but I don't have the same kind of drinking problem as he has. Captain Haddock is pretty constantly drunk in the Tin Tin Books.

It is true. And it's sort of a relief that Bjarnet doesn't drink them. much, because the Straits of Denmark can be treacherous if you don't know every sandbar and overflow current as well as he does. Not to mention the hundreds of islands, dozens of bridges, multiple ports, and ferries zooming all over the place. That is why so many of the big ships passing through higher maritime pilots like him to jump on board. Yeah, he's keeping track of the wind, the traffic, even how the sediment is shifting around underwater, all while maneuvering these sometimes behemoth ships with the precision of a fighter pilot.

Now I'm thinking of you as like Tom Cruise in Top Gun, but on a huge oil tanker. Yeah, but luckily for me, we are doing it in slow most. Billions of dollars of commerce flow through the Straits of Denmark every month. So Bjarnet and his fellow pilots... We are just a little cock in the big machine of the global economy. Now, Bjornay's corner of the global economy is largely oriented around oil. Oil makes up a huge percentage of the cargo passing through the Danish Straits, and most of that oil is Russian.

And these are massive tankers, sometimes filled with as much as 37 million gallons of oil, hundreds of millions of dollars worth. Now, Barney says the majority of the oil tankers that pass through Europe are relatively new. After 15 years on the water, they usually head off to poorer parts of the world before being sold to the scrapyard. But a few years ago, he started to notice something strange. Those older ships started reappearing, making their way through the straits. And when he went aboard, the crew was gruff.

And their facilities, they were not exactly giving Huga. I can go to the toilet and then I can see that if it smells and if it's unclean, it's just a sign of how cheap they want to run the ship. But there were even stranger things about these ships. Bjarnay says he was sure he'd boarded some of them years earlier, but now they had new names. names. When he looked at their paperwork, he noticed they seemed to be using insurance companies he'd never heard of. And many of them were flying flags from countries he'd never seen on these

waters before. Something was just off. They are flying under the radar. They are trying to avoid that we know who is owning the ship, who is owning the cargo, where is the cargo coming from, where is going to. They try to work outside the spotlight. And at some point did these shady, the mysterious ships get a name or a label of some sort? We call them shadow, shadow fleet ships. Shadow fleet? Yeah, the shadow fleet. These ships were carrying full loads of Russian oil

from ports up the Baltic near St. Petersburg out to the rest of the world. And while that might have been normal a few years earlier, after Russia's invasion of Ukraine in 2022, that oil had become the target of Western sanctions. So this shadow fleet of rickety ships that Jarnay was being asked to help pilot, They appeared to be flouting those sanctions. All of a sudden, Bjarnet felt like he'd unwittingly transformed from just a normal cog in the wheel of the global economy

to a cog in the Russian war machine. And Bjornay says what began as a trickle of Shadow Fleet ships back in 2022 has turned into a constant flow. They're coming all the time now, all the time. As we speak, we are servicing two Shadowfleet ships this day. Today, you're servicing two Shadowfleet ships. fleet ships. Yes, it's completely wild west what's going on at the moment. Hello and welcome to Planet Money. I'm Alexi Horowitz Ghazi, and I'm joined today by

swashbuckling reporter Daniel Ackerman. That's right, Alexi. And the shadow fleet that first started to appear a couple years ago has by now become much bigger than Bjarne. It's much bigger than Denmark. There are now hundreds of these Russian oil tankers crisscrossing the globe under cover of bureaucratic darkness. Today on the show, the story of how Western sanctions pushed about one out of every six oil tankers into the shadows. How that shadow fleet is transforming the global oil market, fueling the war in Ukraine,

and threatening the wildlife waters and wallets of every coastal community from Copenhagen to the shores of Malaysia. We wanted to figure out why these shadow ships that Bjarni was having to steer through the Danish straits were showing up there in the first place. And who was behind them? Because the shadow fleet is purposefully shrouded in mystery. Luckily for us, there are a handful of people whose professional lives are dedicated to digging up information on these shady ships. Some of them I know really well, like recalcitrant children, because they're always sort of doing something naughty that they shouldn't be doing. and I'm sort of on top of them.

Michelle V.C. Bachman is a maritime intelligence specialist based in London. She's kind of like a private eye for the oceans. So say you are some European Navy or Coast Guard, trying to figure out whether a boat near your shores might be transporting illicit cargo. You can call Michelle. She has the fancy ship tracking software and secret contacts throughout the world of maritime shipping to answer that kind of question. Though sadly, she refused to share with us her exact research method.

If I told you that, I'd have to shoot you. Are you sort of like the James Bond of the high seas or something? Not James Bond. Maybe call me M. Thankfully, Michelle was willing to walk us through some of the telltale signs that an oil tanker might be flouting international sanctions. And to help explain the whole shadowy ecosystem that's developed around them. For starters, she turned to the example of one of her favorite nautical nearduels, a tanker that was, as we were speaking, carrying Russian oil through European waters.

It's a ship called the Boricay. Let me call it up. B-O-R-A-C-A-Y. Where's the share my screen? Michelle pulls up this tracking software she has that shows a map of the world. There's a little icon of a ship with a trail behind it, showing the path it's been traveling on. Because, like all the other tankers on the ocean, the Boracay carries a, sort of GPS-style transponder.

So, you can see Borike. It sailed through the English Channel today. The ship was right there off the southern coast of England. In fact, not far from where Michelle lives. If you brought your pair of binoculars, would you be able to see this ship? You would have been able to see the ship from Dover at about half-past six this morning. While some people go birding for fun, Michelle could have gone shadow shipping. Yeah, like tanker spotting. Is that a thing?

It is now. At first glance, the Borike looks more or less like any of the hundreds of ships passing through the English Channel every day. But just like a seasoned birder can tell a buffalo head from a golden eye, Michelle can tell that the Boricay is no typical oil tanker, but a shadow vessel. And the ship's identification number tells her that the Boricay is 18 years old. That's basically geriatric when it comes to European oil tankers. And the Estonian Navy just recently documented dozens of deficiencies aboard the ship. And following the ship's trail, Michelle could also see the Boricay had come from Primorsk,

Russia's biggest port for exporting oil on the Baltic. Michelle says up until a few years ago, it was mostly North Korea, Iran, and Venezuela using shady ships to get around sanctions. Then a shadowy Russian oil cabal got into the game. So the story of the Russian shadow fleet actually begins, I would say, several months after Russia invaded Ukraine when it was quite clear that sanctions were coming from the U.S. and from the EU and the UK down the pipeline. After Russia invaded Ukraine in 2022, Western countries wanted some way to punish Vladimir Putin for the invasion and to limit Russia's income. The idea was that less

money going to Russia meant less money they could spend on rockets and tanks and soldiers to continue attacking Ukraine. And Russia's lucrative energy industry was an obvious one. to squeeze. Oil and natural gas revenue funded half the country's federal budget right before the war. But in the long term, the West didn't want to fully ban Russian oil because they didn't want global oil prices to spike. And back then, Russia was providing around 15% of the world's oil supply. Simply eliminating that would make inflation worse for everyone. So it was a very delicate balance back then because while Western governments wanted to reduce income to Russia, they also didn't want to remember.

remove the Russian oil from the market because then you would have Americans paying more at the pump. And that is why the oil price cap was designed. The oil price cap. This was the solution Western countries settled on. Basically, Russia was still allowed to sell oil internationally, but only at a price no higher than $60 a barrel. That was significantly cheaper than global oil prices at the time. In theory, the price cap meant Russian oil exporters would get less money. While the global economy still got the oil it needed to run smoothly. But how to enforce the price cap?

There was no police force or navy charged with monitoring prices. Instead, it fell mostly on insurance companies. If a Russian oil exporter couldn't demonstrate that they were abiding by the price cap, the insurance companies that dominate global shipping could not provide coverage. They were technically made to be the enforcers of this G7 oil price cap. And so they were not able to provide marine insurance unless it was sold below $60 a barrel. Take that nebulous Russian oil cabal. But Russian oil exporters weren't just going to sit back and accept this below market price for their oil.

They were bent on finding a way to get around the sanctions. They needed to move their shipping operation into the shadows. The first big problem they had to solve was the problem of ships. Up until the sanctions, Russian oil exporters would change. charter relatively bright and shiny new ships to move their oil to customers around the world. You know, ships with squeaky clean bathrooms. But now, for the most part, the owners of those bright and shiny ships insisted on complying with the new rules. They would charter their ships to Russian exporters if they could show

they were selling their oil for $60 a barrel or less, with an insurance company backing it up. So the first thing this oil cabal needed was to start assembling their own fleet of ships. So how do you build a shadow fleet? Well, you spend $15 billion. And so in the case of the Russian shadow fleet, it went like this. Michelle says the basic move was that a Russian oil company would find a middleman to buy these old rickety boats on their behalf from Western owners who might have otherwise been getting ready to sell these boats for scrap.

They would front the middleman the money and then lease the boats from them. And the ownership structure was left purposefully complicated. The owners are hidden behind Byzantine layer upon layer, upon layer of special purpose vehicles across Mauritius, Seychelles, Marshall Islands, the United Arab Emirates, India, etc. So good luck finding an owner. It's like a Russian nesting doll of shell companies. Right. And you can see this dynamic playing out in the story of our old nautical pal, the Boricay. the one Michelle could practically see off the coast of Dover with binoculars. Since it was sold in mid-2020, this vessel's had nine ship managers, four registered owners,

three commercial controllers spanning special-purpose vehicles incorporated in the Seychelles, Marshall Islands, Mauritius, India, UAE, Singapore and Turkey. Michelle says that even the ship's name, the Boricay, which is an island in the Philippines, by the way, It's only had that name since the 23rd of September. Before that, it was the Odysseus, the Veruna, the koala, and the Pushpa. The Borke is actually the fifth name this ship has had since it entered the Shadow Fleet a few years ago. But even after this mysterious web of companies started amassing these old boats, they still needed to disguise them, make them seem legitimate enough to sail the seas.

You see, you can think of the global shipping system, kind of like the highway system here in the U.S. In order to roam the highways, there are a few essential things you need. First, of course, to cover damages if there's an accident, you need insurance. The world of maritime liability insurance is dominated by 12 major firms. But pretty soon after Western sanctions, shipping experts like Michelle started seeing the names of new insurance outfits entering the fray. And when she actually dug in to these insurance companies, it turned out some of them were completely made up.

So there was one in Norway, what was allegedly in Norway, but it was really in St. Petersburg, that provided, quote, unquote, marine insurance for these vessels, and it didn't exist. So that is trick number one for faking your way onto the highway of the high seas, fake or shady insurance. Now, Michelle says it seems like our buddy, the boricay, doesn't have any real insurance coverage. And she says, the boricay also doesn't have the equivalent of a legit license plate. Yes, that is the second part of our. global shipping highway analogy, when you travel on a highway here in the US, your vehicle needs to be registered in a particular state in order to get a license plate. On the ocean, instead of a

license plate, you need to have a flag, a fluttering piece of cloth representing the country where your ship is registered, or at least you need the country's capital written on the stern of your ship. But these flags are a little different than license plates. So unlike you or me, if you're in a particular state of the U.S., you have to get a license from that state. But ship owners can pick and choose, and they can say, you know what, I would like to have a license for Zambia just because it's cheap and the rules are really easy. Right. I can run a shipping company in the U.S., but I can choose to have my ships flagged by Zambia or Panama or the Cook Islands or any number of countries that I basically have

zero connection with. Certain countries have turned their flag registries into a kind of cottage industry to generate a little bit of extra income. And whatever flag I as the ship owner choose to fly, that means that country's laws apply to my ship when I'm out on the water. Michelle also says it is the responsibility of the flag state to make sure its ships are following international rules related to safety in the environment. And she says flag states differ a lot on how seriously they take this responsibility. You can have good flags like Liberia and the Marshall Islands that are the world's first and third-largest flag registries. They have great technical oversight.

They take risk and compliance seriously. And then you have permissive open registries. So you have Gabon, Cook Islands, Gambia, Sierra Leone, Cormoros, Cameroon. I could go on. We reached out to each of those registries for comment and didn't hear back. Two of the emails listed on their websites bounced. If we use the license analogy, they've been handed. them out like candy and taking the money, but they haven't been making sure that the license

holder is able to comply with the terms and the rules that are needed for safe navigation. In other words, Michelle says some countries will collect a license fee and hand out a flag, but then kind of look the other way if that ship is engaged in some kind of shady behavior. And if a shadow vessel doesn't want to deal with a real country at all, there have been several recent examples where shadow vessels have flown flags that are completely made up. Like one of the hottest made-up flags that shadow ships are flying of late is apparently Aruba, even though the real Aruba does not offer flags. As for our little buddy, the Boricay, so far in its three-year shadow fleet career,

the Boricay has sailed under seven different national flags, and that includes the flags of countries that don't even register ships. So at the moment, it is flagged with. Benin and it was previously flagged with Malawi, and they are both fraudulent registries. So that's just a typical sanctioned dark fleet tanker. Okay. So that is how this shady network of Russian-affiliated companies managed to build a fleet of rickety old tankers and send them around the world. First, you need a boat. Second, you need to outfit it with some shady or outright fraudulent insurance. And lastly, you need to

get shady or outright fraudulent flags. You know, let your fraud flag fly. And if you're wondering why these shadow ships don't just get pulled over by the high seas equivalent of the highway patrol, Michelle explains the rules aren't being super proactively enforced because there isn't really a highway patrol. There's a UN agency called the International Maritime Organization, which comes up with all the rules of the road, but actual enforcement is left up to individual coastal countries. And that is where things get tricky. Right. If you are a maritime nation and you encounter a suspicious ship like the Boricay entering your territorial waters, you could try to stop it to make sure everything is above board, but there are a few things that make that extremely difficult.

The first is a principle adopted by the UN called the Right of Innocent Passage. So that means if they're going from A to B and they have to get through your waters. So the English channel being a great example, then then they can't be stopped. Even if you don't like that ship, even if it's unsafe, even if it's flouting rules and regulations, it has the right of innocent passage.

In order for the global economy to function, there is this presumption of innocence. If countries just started stopping each other's ships, willy-nilly? Can you imagine what would happen if everybody exercised that? You know, the English could say to the Germans, well, you know, I don't like the look of that ship. You can't go through my waters. And in fact, some countries have learned the hard way how explosive it can be to challenge that

presumption of innocence, even when there's evidence of guilt. Like when the Estonian Navy tried to stop a shadow ship that came into its waters without a flag. And what happened was that a Russian fighter jet came out to defend that vessel and briefly intercepted NATO airspace in a very strong signal to say, don't mess with our ships. So the cost of trying to enforce these maritime regulations seems to be higher than the benefit. Still, the shadow ships want to avoid any possible friction, from inspections all the way up to airborne warfare.

So they do everything they can not to attract attention from authorities. Yeah, like remember that GPS-style transponder that oil tankers have on board, the ones Michelle uses to track the journey of ships like the Boricay, those are there for safety to help ships avoid collisions. But Michelle says shadow vessels often turn these transponders off. They might go dark, for example, during a ship-to-ship transfer, where a shadow vessel with Russian oil pulls alongside another tanker, and using a giant hose transfers that oil onto a legit ship.

The oil sometimes undergoes three or four ship-to-ship transfers in a single voyage. It's like money laundering, but for oil, So by the time it gets to a refinery, it's harder and harder to tell where that oil actually came from. Do you have any sense of whether the boricay has been up to any of this? Yeah. It's had 25 different examples of dark activity. It's a very, very naughty ship. And it's not like this naughtiness is any secret. Michelle knows it. European governments know it. But enforcement has proven near impossible. Just days after we spoke to Michelle, the boricay was stopped and boarding. by the French Navy.

France even made minor charges against its captain. But the captain and the ship were let go within a few days. Soon after, Russian President Vladimir Putin weighed in calling the French actions piracy and saying, quote, how do you deal with pirates? You destroy them, end quote. And remember, the badly behaved Boricay, it is just one piece in a whole armada of international naughtiness. By now, Michelle says the Russian Shadowfleet has grown to over 600 ships.

ships, with little to no insurance, constantly traversing the globe and filled to the brim with sanctioned Russian oil. So it's all part of a cat and mouse game that's being played in these waters. After the break, how the rise of the shadow fleet could spell catastrophe for one or more unlucky coastal nations. And the bind our Danish maritime pilot finds himself in as he guides shadow ship after shadow ship towards its payday. When a ship is not insured anymore.

How innocent is this passage, actually? And why don't we try to stop them? Okay, so what started as a few shady ships back in 2022 has now grown to a fleet of over 600 Russian shadow vessels. The shadow fleet now counts for about one in six oil tankers across the world. It's a massive maze-like workaround, all so that Russian oil exporters could avoid the price cap. Michelle says she gets more and more calls and inquiries all the time these days,

asking her to track down information about ships like the Boricay. She says the situation only seems to be escalating. And there have been signs that Shadowfleet boats, including the Boricay, may also be carrying out espionage activities in the Baltic, allegedly doing things like launching drones and cutting the undersea power and data cables that link Scandinavian nations. On its face, this whole situation feels like a classic tale of unintended consequences. You try to regulate something, it goes underground.

Think prohibition. And sort of like the Al Capone's of the past, there are some who have taken advantage of this new underground oil economy. So the biggest beneficiaries have been the buyers of this cheap oil. The main buyers of these sanctioned Russian oil were countries that did not participate in the sanctions, places like China and India. To those buyers, Russia has used its shadowfleet to sell its oil above the price cap, but still below the global market rate for oil. That meant that China and India were getting oil on sale. They started buying a ton of it.

You can actually see this rerouting of the global oil trade playing out on Michelle's real-time map of global shipping, little lines that each represent an oil tanker's journey. In fact, you can see the Boricay is motoring its way to India as we speak. Oil price cap has completely recalibrated global oil flows. So India once imported about 100,000 barrels per day of Russian crude, it now imports 1.5 million barrels per day. And China has been the key beneficiary of deeply discounted sanctioned oil. And over the last year, another country has become one of the largest consumers of Russian fuel oil.

That is Saudi Arabia. that Saudis have been importing more and more Russian diesel to fuel their own domestic power needs and freeing up more of their own supply for export. So they've been able to get Russian oil for cheap, sell their own for a higher price, and pocket the difference. And the sanctions have minted other smaller time winners, like the middlemen who've helped facilitate this new oil underground. So that includes the Western ship owners who managed to sell their rusty old oil tankers into this shadow fleet when they really should have been scrapped. And also places like Dubai, which is supplanted oil hubs like Geneva as the new business and financial center of this shadow oil industry, the place where Russian oil companies negotiate their deals. Now, Western nations have been trying to tighten the screws on this whole shadow economy using additional economic weapons, like identifying individual shadow ships and denying them services like fuel and maintenance.

At the same time, as global oil prices have dropped, some countries have proposed lowering the price cap. on Russian oil. The Trump administration has taken its own route to punish one of the big buyers of Russian oil, India, with huge tariffs. Just this week, the U.S. pressured India again to reduce its imports of Russian oil, and Reuters reported some refineries were planning to. As for the original purpose of these Western sanctions, limiting Russia's revenues. Do we have any sense of how effective from an economic perspective this approach to sanctioning? Russian oil has been? Like, has it actually decreased the flow of funds into the Russian war effort in Ukraine? Well, I think it certainly has made shipping a lot more expensive for the

Russians. I mean, first of all, you have to look at the fact they spent $15 billion creating this fleet. Plus, Michelle says, the oil Russia has managed to export on its shadow ships has generally sold for less than it would have if there hadn't been any sanctions. And so they have earn less, even though they've continued selling. So on the one hand, the sanctions are sort of doing their job. Russia is losing something in this equation. But the unintended effect of these sanctions, pushing this massive part of the global energy economy underground, that could come at an enormous cost.

A cost, Michelle says, that we'll fall on whatever unlucky coastal nations happen to be nearby, if and when one of these uninsured shadow tankers explodes or runs aground or crashes and causes an oil spill. The Dark Fleet is an accident waiting to happen. How there has not been an accident yet is beyond me. Michelle says one 27-year-old shadow ship exploded a couple years ago off the coast of Malaysia. It killed three crew members. There wasn't much oil on board at the time, but if there had been, there could have been

a massive oil spill. If or when there is an accident, politicians will be screaming. Why wasn't anything done? how could we let this happen? And then there will be a lot of people in the maritime industry and people like me that will say, but we've been telling you for years and marine insurers have been really plain

that when there is an accident, it will be a billion-dollar oil spill. The fear of a billion-dollar oil disaster in the place Bjarnay Skinnerup calls home is in part why our Danish maritime pilot continues to steer these vessels towards safety when they ask for his help to pass through the Straits of Denmark.

Yeah, you can remember what was it on the west coast of the state, what was the call this one they had there in the... Exxon Valdez. Yeah, if we have something like that, it will be terrible. And there will be no one to pay other than the Danish taxpayers because if they don't have an insurance, who's going to pay? Bjarnet is torn about his role in all of this. He doesn't want to see a huge oil spill envelop the Danish coast

or close down one of the most economically important waterways in the world. And his professional responsibility is to get every vessel he pilots safely through the Danish straits, shadow ship or not. It's a duty the Danish government pledged to provide all the way back in 1857. But today, Bjarne says, piloting these Russian oil tankers toward their payday also means stocking Vladimir Putin's arsenal. So I'm actually making a living out of making sure that the oil from Russia is coming out. And that is also a very, very strange feeling because it's just.

just this contradiction that when I do a good job, I make sure that they are more artillery grenades, more drones, more killing in Ukraine. So it's, yeah, and I don't want to be emotional here in this interview, but it is actually a little bit emotional because I cannot see what an ordinary Danish maritime pilot can do. For now, Bjarney is piloting every ship with care, and he's reporting any suspicious activity he sees to the authorities. But he's still caught in this kind of catch-22. He can either keep the Danish coastline clean or his conscience.

But he can't quite do both. Have you heard the good news? Planet Money has a book coming out, and you can pre-order it now at planetmoneybook.com. That is planetmoneybook.com. This episode was produced by Willa Rubin and edited by Marianne McCune. It was fact-checked by Sierra Waters and engineered by Quasi Lee and Sina Lafredo. Alex Goldmark is our executive producer. I'm Alexie Horowitz-Gazi.

And I'm Daniel Ackerman. This is NPR. Thanks for listening. You know,