Andrii Klymenko: "The Shadow Fleet and Price Ceiling are Myths Contrived by the US for its Own Convenience"

Andrii Klymenko, Head of the Monitoring Group of the Black Sea Institute of Strategic Studies and editor-in-chief of the BlackSeaNews, spoke in an interview to the Tyzhden about the Russian shadow fleet, the effectiveness of sanctions against Russian oil, and the prospects for limiting Russian oil traffic in the Baltic Sea.

- It is often said that sanctions against Russia in the oil sector are symbolic and ineffective. Do you agree with that?

Over the three years of war, an unprecedented number of sanctions has been imposed on the aggressor state, the Russian Federation. Their number is increasing and we certainly can feel the impact of these sanctions. For instance: if earlier, 15-20 TU-95s, each carrying several missiles, were attacking us, now air raids have become less frequent. They fly five or six planes, each carrying just one missile. There have been significantly fewer missile attacks because there are problems with their production.

We understand that if Russia uses inferior North Korean versions of Iskanders, North Korean soldiers and, being unable to launch its own drone model, copies the Iranian one istead, it means that sanctions do have an impact. But unfortunately, a rather slow one.

Naturally, all of us are interested in sanctions having a much stronger impact on the Russian military-industrial sector because the delay is measured in the lives of Ukrainians, both military and civilians, that are being destroyed. So, of course, the question is: how and what should be done to radically reduce Russia's financial resources for waging war? And in that regard, the maritime export of Russian oil and oil products provides us and our European friends, allies and partners with unique opportunities.

- What exactly is the uniqueness of the current moment?

Our Baltic neighbors, as well as other EU countries, have begun to explore the topic of Russian oil - a very favorable development for Ukraine. We are now all looking for the best ways to reduce the export of that oil. Ukrainian experts and state leaders have been working together on that issue since October 2024. It is discussed at virtually all meetings with the countries of the North and the Baltic region.

Russia has long been called a "gas station” of a country, which is true: depending on the world prices, energy exports account for well over half - from 55 to 70% to be more precise - of all Russia's export earnings.

I’d like to point out that for a long time, both in Russia and in Europe, the attention of both the society and the press has been focused mainly on natural gas, that actually, has never accounted for more than 20-22% of all Russia's natural resource exports. Coal makes another 6-8%. And the rest, i.e. three quarters of the revenues, are crude oil and oil products. A few months ago, when besides the Black Sea, we turned our attention also to the Baltic Sea, we discovered that the latter accounted for 60% of Russia's total maritime oil exports, while only 20% went through the Black Sea and the other 20% - through the Far East. The Northern Sea Route exports through the Arctic are very small.

Unfortunately, there is little we can do on the Black Sea with its the narrow Bosphorus/Dardanelles neck due to Turkey’s well-known traditional position of sitting on two chairs at once despite its pro-Ukrainian rhetoric. In the Far East, at the same time, Russia's crude oil pipeline goes mainly to China, a bit to North Korea and then beyond. So, there is little we can do there either for purely geographic reasons. But the Baltic Sea, that accounts for 60% of Russia's maritime crude oil exports, is, of course, a completely different story.

- What are the estimated oil volumes we are talkiing bout there?

Approximately 11-12 million tons of crude oil and 3-4 million tons of oil products passing through the ports there monthly. All of the Baltic Sea coastal states are both the the EU and NATO members, and a little further up to the Danish Straits is Norway, who is a NATO member, although not an EU one. That is, the Baltic Sea is really an EU and NATO inland sea. So it is there that we, Ukraine, aim to drastically reduce the marine export of Russian energy resources.

Recently, the world media reported that due to the EU sanctions, Russian oil sales had significantly dropped in December. In truth, they dropped not in December, but in January of this year, and not due to the sanctions, but as a result of the Ukrainian Armed Forces’ long-range drone attacks on Russia’s main export port of Ust-Luga, which resulted in now only 44 tankers instead of the usual 55 operating monthly from there. That is 1 million tons of oil that Russians had to compensate for through another port, Primorsk, also in the Leningrad region.

For six months now, it has been said that about 300 tankers are under the UK, the EU, and US sanctions. But we don't see any dramatic changes as a result. Why so? Because here is what it looks like in reality:

Every month, 95-100 tankers, carrying 100 to 150 thousand tons of oil each, sail from the Baltic ports. We are facing a huge myth called “the shadow fleet.”

- Why is it a myth? The Western press is actively discussing that fleet.

As monitoring experts, we are confident that the Americans have contrived the whole “shadow fleet” issue the same way they came up with the so-called “price ceiling” of $60 per barrel. According to the myth, the shadow fleet is difficult to see, it is old, dangerous, and it’s unclear who really owns it.

But when we started to look into that shadow fleet legend, we quickly discovered that we could clearly see all the tankers, and that there were about 20% more of them than had been reported by all the reputable wealthy global marketing centers that all major international news agencies get information from.

Once, I think it was in July 2024, we compared our data with of one of the world's largest business exchange publications citing one of the largest centers and found out that they had recorded 29 fewer tankers than the 99 or 100 we had discovered. But this is no reason to call them “shadow fleet” that cannot be seen, as we can clearly see them!

The problem is that all their data is processed by artificial intelligence, and without human verification, at least 20% of tankers and volumes go undetected. Is it deliberate? It’s none of our business. Overall, it looks like they are still living in a peacetime mode. For instance, they don’t take into account the impact of Russian electronic warfare that spoofs or hides the signal from maritime information systems.

Their AI doesn’t see cases when a tanker crew just turns off the EW system in such a way that the port of departure isn’t shown. But we do, although we do not disclose our methodology. Our team has been tracking ships at sea using maritime services since 2010. And 15 years of experience meas a lot. Besides, perhaps, Ukrainian experts working with maritime monitoring are more motivated than those from Europe or the US.

- Which countries export Russian oil?

In January 2025, 96 tankers with crude oil only (no oil products) left the Baltic Sea. Tankers owned by Greek shipowners are in first place, accounting for the same 30% of the total, as before. We have been closely monitoring the situation since April 2024. Why doesn't anyone talk about it? Perhaps it is inconvenient to admit that a third of the volume of Russian crude oil from the Baltic Sea ports is transported around the world by tankers from the EU and NATO countries. They don't transport it to Europe, of course. But they do carry oil to India, Turkey, and China.

We know everything about each tanker, including its owners and even the address of the shipowner's office. We are talking about five very well-known Greek companies owned by Greek billionaires. The second place with 17 tankers is consistently held by... make a guess? Russia. 5-6 of those are still formally registered in the Russian Federation, while the rest - in Dubai (UAE). And this is no secret either, because 1,500 Russian companies have also re-registered in Dubai.

You may be surprised though with who came in third place now – such “major maritime power” as Azerbaijan. 14 tankers are owned by companies registered there. Nine are registered in China, mainly in Hong Kong, with another nine in India, eight in Turkey, three in Vietnam, and one in Kazakhstan.

Note, that only 1 out of 96 tankers can be truly considered a shadow fleet one, due to being registered in one of the so-called flag of convenience countries. Those are offshore jurisdictions created to minimize taxes, so it’s not a crime. But of 100 tankers there are only 6-9 such vessels.

By the way, anyone who understands the subject knows that the offices of those who register legal entities on these islands are usually located in the UK, the US, and other developed countries.

Overall, the issue of the flags is irrelavant, as nowadays, those can be changed over four- five days. For example, if the media reveals that many tankers with Russian oil sail under the flag of, let’s say, Barbados, then to reassure everyone, the latter may announce that it’s revoking their registration. But then in four days the tankers operating company will re-register them under the flag of another, similar island state.

Another fake about the shadow fleet is that those are very, very, very old ships that are dangerous for the environment. There is some truth to it, but not all.

In the maritime business, the only criterion for whether a vessel can be operated is safety considerations. And the main criterion for a tanker’s technical condition is whether it is on the white, black or gray lists of the international port control memoranda - each country has such port control authorities. If a vessel, especially a large tanker carrying 100-150 thousand tons of oil, may create an additional danger to the port, the country, the environment, and so on, it’s mandatory that a port control inspector checks its technical condition.

Here is the technical data that is currently available on tankers sailing from the Baltic Sea:

In January, 15% of the 96 tankers transporting crude Russian oil from the Baltic were blacklisted by international memoranda. In December, it was 16%, and in September, 28%. Besides, there are so-called gray lists that state various violations. Those are detailed lists that record that something is wrong with the engine, the flappers aren’t working, the sides have issues, there are problems with such and such equipment, etc. If there are lots of those, the tanker gets on a black list, and if not too many - on the gray one. This latter includes about 40% of tankers that currently sail from the Baltic Sea. Their average age in January and the previous months was 15.3 years. Most specifically, of the Greek ones - 12 years; Azerbaijani, Chinese, Indian, and Turkish – 18; Vietnamese - 21 and Kazakh - 23.

The fright was very much spurred on by the the Black Sea accident with Russian tankers on December 15. The following day, December 16, there was a meeting of the Baltic and Nordic countries presidents and prime ministers in Tallinn, where naturally, the situation prompted reflection. The accident had caused 8 thousand tons of fuel spilling into the sea. But the Baltic Sea tankers were carrying 150 thousand tons of crude oil. So, if not 8, but 150 thousand tons were spilled into the Baltic Sea that is at least one and a half times smaller than the Black, the repercussions would be incomporable. Of course, there is also a question of insurance, so, half of the tankers have the best possible insurance - the London Club one, while the rest are insured by companies in India, Russia, and China. 

The next notion myth is the so-called price ceiling that first appeared on December 7, 2022, that is, after the start of the great war, simultaneously with the embargo imposed by the G7, the EU, and Australia. Those countries merely stated that they refused to buy it for themselves, but for some reason, it has been referred to as “sanctions.” In truth, there are no sanctions on Russian oil and oil products, but only an embargo. So, if, for example, India transports that oil, it does not violate anything, because it hasn't signed up for anything.

Therefore, it is an exaggeration to say that Russian oil is under sanctions – it’s not true, there are none. And finally, onto the price ceiling. Back in December of 2022, when the price ceiling of $60 per barrel for crude oil was announced, Putin issued a decree on the subject, that has since already been extended three times and is still in effect. It categorically prohibits Russian companies that sell oil by tanker to use that price ceiling when determining the price, and even to mention it anywhere. There are many dozens of journalist investigations, including by the Associated Press, CNN, Reuters, and other major global media outlets, that have clearly demonstrated that oil in India and China is sold from tankers at much higher prices than the ceiling one.

The Americans contrived that format to make it unworkable, since there was no verification mechanism. On the Russian side, there is a commission of the Cabinet of Ministers of the Russian Federation, headed by Mishustin, which controls the implementation of Putin's decree. So, the ceiling is a huge fake that appeared because of the Biden Administration's fear that, if, God forbid, world oil prices rise due to any barriers put in place, that would lead to a 5-cent increase at the pump for the American voters.

Everyone was happy with it, because no one was ready to do anything else. But today the situation has changed. And I don’t mean the change of the president of the United States - I mean the mood in Europe, which is now different.

We are now saying: Dear European countries, our friends, allies and partners, we get €100 billion in aid a year. Half of it goes to the budget for social spending and the other half - for shells, tanks, air defense systems, and other weapons. That means that you, our allies and partners, take that money from your budgets, your voters, your social programs. And during that same year, tankers that pass your coastlines are transporting Russian oil worth about one and a half or even twice the amount you give us. All of this in broad daylight passes through your maritime economic zones, Danish territorial waters, and so on, while you continue to take 100 billion or more per year from yourself and give it to support Ukraine. That nonsense must be stopped. And the Baltic countries are now thinking about the issue very seriously. They are quickly coming to the realization that something has to be done about it.

Of course, besides the Black Sea accident and the suspicions of sabotage, the damage to several tankers sailing from Russian ports in the Baltic Sea, have also demonstrated the threats to the Baltics. We would really like them to adopt an action package that would reduce that oil traffic by at least half. It is time to impose a full economic embargo on all trade with Russia. And by the way, six months ago, Daniel Fried, the father of the American sanctions policy, who for many years headed that the formidable OFAC, said the same thing.

- What does the Ukrainian side insist on today?

Ukrainian maritime lawyers say that the responsibilities of a coastal state, as defined by the UN Convention on the Law of the Sea, also allow for the application of Article 51 of the UN Charter on self-defense.You can actually do anything you want: stop, introduce additional checks and extra demands, accompany vessels and so on.

Overall though, the current international maritime law is a peacetime law. But today it’s wartime in Ukraine, in Europe.

We see aggressive actions in the Baltic Sea - so far, just sabotage. So, the Baltic states are finally coming to the realization of that reality. Not only Lithuania, Latvia, and Estonia, but also Poland, Germany, Finland, and Sweden are already saying that they should probably adopt some of their own legislation that would expand our capabilities as coastal states in regulating maritime oil traffic in the Baltic Sea.

One tanker is a million barrels. Multiply that million by $70 per barrel and you get the cost of the cargo. Plus $20-30 million for the cost of the tanker for the total of $100 million per voyage. Of course, all that may be subject to court appeals, therefore, we need to create a solid legal framework so that we don't have to deal with possible lawsuits. Ukraine needs that process to be very fast. And Ukraine, I am sure, will continue our own drone sanctions. 

In addition, at least 15% of tankers are blacklisted under international port memoranda, meaning that they need immediate repairs. We need to agree that tankers on those blacklists are not allowed to operate in the Baltic Sea. The next step would be for the Baltic Sea countries to say: "Dear Greek comrades, how long will 30% of the tankers serving the needs of the Russian military-industrial complex continue to operate under the Greek flag every month? Please remove your tankers from the Baltic Sea, because you are supporting the aggressor." That makes 45%. Next, let's talk about the service life. We can declare that tankers older than 15 years cannot be used, in which case Azerbaijan, China, Turkey, Vietnam, Kazakhstan and others would immediately drop out of the game.

Do not believe the myths. Instead, please, use our data, analyze it and act quickly to reduce the flow of bloody oil that makes the war endless.

(The interview was first published in the Tyzhden on February 18, 2025.)

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