The Peter Zeihan Podcast Series - The Shadow Fleet Is Sinking || Peter Zeihan

Episode Date: August 19, 2026

The first of Russia and Iran's aging shadow fleet is sinking. The tanker is carrying ~1 million barrels of crude bound for India, but that oil is already leaking into the water off the Omani coast. Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter: https://bit.ly/4fSbqTM

Everybody, Peter Zun, coming to you from the peak of Sheridan. But today we're going to talk about the Russian Iranian shadow fleets and a ship that is in the process of sinking off the Lomani posts in the Middle East. If you remember, we've got sanctions on Iran, we've got sanctions on Russia. And so both countries have turned to what are called shadow fleets, unregistered vessels that are old and were destined to be scrapped that take out insurance. from the Russian government, and the first one of them is now actually sinking. And we're honestly pretty lucky here. It's been for years since the Ukraine war got going. And in that time, you would expect more of these things to go down.

But it wasn't until recently that Ukrainians started to openly attack the Shadowfleet in the Black Sea. And so far, they haven't actually tried to sink anything. Now we've got one that is on its own that is taking Russian crude to India, is now sinking. It's the Carolyn Benghese, I believe it's its name. It carries about a million barrels. It carries about a million barrels. And it is now sinking off the coast of Oman. Already an oil, it's about 400 square kilometers.

And we're already seeing oil starting to make landfall on some of the Oman Islands. It's in the last 48 hours, its condition has deteriorated significantly. And it is very clearly taking on water. I can't tell you when it's going to sink. But there's really no hope that it's going to make it too. its destination at this point. And so we're talking about an ecological disaster that is at least three times as bad as what happened with the Exxon Valdez. It's an open question whether anyone will let this thing dock because it's just going to leak in port then. But at least one of the

compartments is damaged to the point that the ship is going down. Anyway, a couple things to keep moving forward. Number one, since this is the first real incident with a shadow fleet vessel, we don't know how the insurance system is going to work. Normally, if you had a fleet of vessels in this sort of condition and one of them then sunk on its own without getting shot at, you would see an explosion and insurance race. It would probably lead to the decommissioning of every ship of its class. That's not going to happen this time because these are ships that should have been decommissioned already. So it's an open question how Russian insurance is going to pay out because the state created the insurance policy specifically to evade what everybody else normally does on the high seas.

And it will be interesting to see if the Russian government actually pays out to cover the environmental institution that will be required, for example, for the Omanis. The second thing to watch is to degree to which the Russians do or do not act will shape what the Ukrainians do and do not do. because if the Russians do not honor their own insurance policy at all, then it's up to the Ukrainians to probably sink a couple directly. And when that happens, no one's going to allow these ships anywhere near any of their ports. So we've been talking about since the early part of this year, how countries are getting more and more aggressive with the shadow fleet. Now we're seeing the decrepit nature of the vessels probably being their own worst enemy.

And as the Shedda Fleet gets retired, we're looking at another couple million barrels a day just disappearing. It's really hard to get a grip on Russian exports right now because the Ukrainians are attacking so much energy infrastructure. But at its peak, it was about 5 million barrels a day of raw crude, plus another 2 million barrels a day from Iran. We're looking at losing all of that as this year draws on. So, you know, exciting times. Take care.