European shipowners keep Russia’s shadow fleet afloat – and cash in billions
Western shipowners received more than 6 billion dollars by selling old oil tankers to a shadow fleet transporting Russian oil, an international investigation led by Follow the Money has found. German, Norwegian, British and above all Greek businesses profited from exceptionally high prices for old, rusty and unsafe tankers. These ships are now used to transport Russian oil, circumvent sanctions, and fund Russia's war in Ukraine.
This article in 1 minute
What's the news?
- More than a third of a shadow fleet of tankers transporting Russian oil consists of vessels that had previously been owned by shipowners from Western countries – the same countries that are sanctioning Russia because of its war of aggression against Ukraine.
- These 230 aging tankers were sold for exceptionally high prices. The owners pocketed over six billion dollars for vessels that would otherwise have been sold for scrap.
Why is this important?
- The shadow fleet is used to transport Russian oil above the price cap introduced by Western countries. This indirectly provides the Russian state with billions of dollars in revenue to fund the war against Ukraine.
- Although the sanctions against this trade are being ramped up, not much has been done to prevent the sale of old tankers into the shadow fleet.
How was this investigated?
- The Kyiv School of Economics Institute provided a list of tankers that have opaque ownership that have been transporting Russian oil.
- The Shadow Fleet Secrets is an ongoing investigative project initiated by Follow the Money. In collaboration with 13 other newsrooms and 40 journalists from around the world, this international collaboration explores the ownership structures of vessels in the shadow fleet and sheds light on the often-overlooked crews operating these ships.
- Partners in the project are, amongst others, Earth Dialogue and SourceMaterial in the United Kingdom, Süddeutsche Zeitung, NDR, and WDR in Germany, De Tijd in Belgium, DanWatch in Denmark, Solomon and Inside Story in Greece, OCCRP, IRPI in Italy, and NRK in Norway.
This article is part of an ongoing series.
The Shadow Fleet SecretsParis Kassidokostas-Latsis is no stranger to wealth or headlines. The 42-year-old film producer, once engaged to American socialite Paris Hilton, is an heir to one of Greece’s richest families and has built a reputation that bridges the worlds of Hollywood glamour and the maritime world.
The entrepreneur who looks more like a rockstar than a businessman made headlines once more last autumn when his company Marla Tankers sold two oil tankers for a reported 84 million dollars. Only six years earlier, he had bought those two 250-metre-long vessels for less than 50 million dollars.
With this, Kassidokostas-Latsis not only made a lot of money – he also helped bolster Russian President Vladimir Putin’s war chest.
Known as the shadow fleet, ships registered in different countries around the world transport Russian oil under the cloak of an opaque ownership structure and in most cases without Western oil spill insurance.
Since the start of the war, Russia earned over 800 billion euros by exporting fossil fuels. Tankers are also used to spy on Russia’s enemies, map critical infrastructure and even destroy undersea electricity cables.
A total of more than 6 billion dollars has flowed into the coffers of Western shipping magnates since the start of the war in February 2022
Two of those ships that have shipped Russian oil are the ones Kassidokostas-Latsis sold. Yet, he is by far not the only Western shipowner who has been reeking in exceptionally high prices for old oil tankers.
Follow the Money, together with an international team of 40 investigative reporters from nine countries, found that at least 230 vessels have been sold by owners from Europe and the US into the shadow fleet and with that help the Kremlin avoid sanctions on the Russian oil trade. A total of more than 6 billion dollars has flowed into the coffers of Western shipping magnates and maritime investors since the start of the war in February 2022, the Shadow Fleet Secrets project reveals.
Shipowners from 21 of the 35 countries that sanctioned oil trade with Russia sold ships that ended up in the shadow fleet. Most of them are sold by Greek owners, followed by British and German owners.
For the investigation, FTM and its media partners analysed hundreds of files of vessels data, maritime information and broker reports and spoke with dozens of industry insiders and experts.
Avoiding EU bans
The European Union banned the direct sale of ships to Russian companies in late 2023 – but that didn’t deal a big blow to the shadow fleet.
That’s because almost all of the vessels are, on paper, not owned by Russians – instead, they’re registered with companies in India, on the Seychelles, in Hong Kong, or Vietnam. Selling to these third countries is not illegal.
Currently, the independent research institute Kyiv School of Economics (KSE) estimates that a shadow fleet of over 600 tankers is shipping 70 per cent of all Russian oil exports.
The ownership, the managers – who are responsible for the day-to-day operations – and insurance companies are registered in non-Western jurisdictions. These vessels stay away from European ports, thus avoiding inspections.
This was the case of Greek millionaire Kassidokostas-Latsis, whose two 15-year-old tankers – the Fos Picasso and the Fos Da Vinci – were in November 2024 formally transferred to their new owner: Phuong Dong Petrol Transportation, a company based in the Vietnamese capital of Hanoi that already owned at least one shadow fleet vessel at the time. Both ships were renamed and the flag under which they operated was changed from Malta to Panama.
Phuong Dong Petrol Transportation did not respond to requests for comment.
Less than a month later, both tankers set course towards Russia. There, at the Baltic port Ust-Luga near the Estonian border, more than 120 million litres of Russian oil were pumped into the cargo tanks of each of the vessels, according to financial analysis tool Bloomberg Terminal – to the likely tune of some 50 million dollars.
Kassidokostas-Latsis and his company Marla Tankers did not reply to requests for comment.
© Follow the Money
© Follow the Money
With this, the vessels help the Russian government maintain its crucial oil revenue despite Western sanctions.
Revenues from the energy industry account for somewhere between 20 and 50 per cent of the federal budget.
In late 2022, the G7 countries had introduced a price cap on Russian oil. The aim was to reduce Russia’s revenues from its oil resources by not allowing companies to facilitate crude oil or oil products being sold above a certain price.
Still, companies that aren’t registered in G7 countries or the EU aren’t bound by the price cap, so Russian oil can be shipped by ships registered elsewhere to avoid it.
As Russia had previously relied on Western ships and companies to transport its oil, it was quickly on the lookout for tankers that were or could be registered in third countries to avoid the oil price cap.
And it swiftly found willing sellers.
With Russian demand for old tankers hiking up prices, shipowners around the world saw a chance to sell a tanker for good money, tankers which in many cases would have been destined to be sold for scrap.
Companies argue that they couldn’t have known what their ships were being used for.
© Follow the Money
© Follow the Money
One of them is Belgian marine transport company Euronav – which recently changed its name to CMB.TECH – received 135 million dollars for five vessels that ended up in Russia’s shadow fleet in 2022 and early 2023.
Spokesperson Katrien Hennin said it hadn’t known the vessels would be used for that purpose.
“We have no insight into what happens to the ships after the sale and that is not our responsibility. To whom the buyer resells a ship or how he operates the ship legally or illegally is beyond our control,” Hennin said.
But while that might have been true at the time that Euronav sold the vessels, sellers have to by now check that their ships weren’t used to circumvent sanctions, the EU’s sanctions envoy David O’Sullivan told Follow the Money: when introducing the ban for direct sales to Russian companies, the EU also mandated that European shipowners need to report when they sell a ship to third countries to national authorities.
While authorities can’t block those transactions, it was still an effective way to combat sanctions circumvention, O’Sullivan said.
”People selling vessels have to notify, and they have to prove, that they have checked [that] the vessel does not undercut the sanctions or the price cap,” he said. “We are satisfied that this has created a situation where companies are stopping to reflect and say: ‘okay, we have to be a bit more careful here’.”
Follow the Money and its media partners identified at least 32 tankers of European owners that were sold into the shadow fleet after those rules came into effect at the end of 2023.
A ship broker, who requested anonymity because of the sensitivity of the discussions, said it ultimately came down to profits.
“An investor is only interested in one thing, and that is money. I think the ethical line is very thin,” the broker said. “If it's allowed, they'll do it.”
Overall, Greek shipowners sold ships worth almost 4 billion dollars, UK-based companies sold 22 tankers to the tune of 590 million dollars in total, and German shipowners raked in 190 million dollars.
Michelle Wiese Bockmann, an analyst at Lloyd’s List, said that Russia’s demand for used tankers had pushed European companies to sell more of them.
“If you've got a really old car that you don't really want to keep anymore and … it's worth two thousand euros, but somebody else says to you, I'm going to give you four thousand for your car. Then you are going to not sell them one car, you're going to sell any single car that you can find,” she said. “And that's essentially what happened with the assembling of the Shadow Fleet. A lot of European shipowners had old tonnage that they thought wasn't really worth much. All of a sudden it doubled in value – and so they scrambled to sell it and make profits.”
When profiting from prices driven up by Russia’s war in Ukraine, shipowners couldn’t argue that they didn’t know where their ships ended up – even if there were no restrictions to prevent it at first.
“Everybody with an old ship in Europe sold it and it ended up in Russian trading,” she said. “It would have been impossible not to know the ultimate fate of that vessel. … I cannot think of any tanker sale of a ship over 15 years that did not end up in Russian trading and the prices were much higher than they were a year ago before the invasion. So it was very, very obvious.”
Battling the shadow fleet
The European Union, the United States and United Kingdom have over the last year stepped up their efforts to rein in the shadow fleet, partly because of the realisation that the old and underinsured tankers could break down at any moment and cause a major environmental disaster.
To increase pressure on companies that transport Russian oil, the EU has also moved to sanctioning individual tankers, blocking access to EU ports and EU services. Vessels can be sanctioned for transporting Russian oil and not adhering to the G7 price cap and for being involved in dangerous shipping practices – like ship-to-ship transfers of oil near Greece, Malta or in other locations.
So far, almost 300 oil tankers have been sanctioned by the Western governments, most of them in the last few months. With 59 sanctioned tankers, the EU is lagging far behind the 213 oil vessels that the U.S. government listed.
The government under Joe Biden, in its last days in office, sanctioned 155 vessels in a move that is seen as the biggest, although belated, blow to the shadow fleet until now.
© Follow the Money
© Follow the Money
The EU is currently preparing a next sanctions package that also targets the shipping sector.
In it, the Commission is proposing to make it easier to sanction individual tankers, according to the plans. The EU executive is also suggesting adding another 74 vessels to the sanctions list, the draft seen by FTM shows.
The draft package, which still needs to be approved by EU countries, currently does not include specific measures to prevent the sale of ships into the Russian shadow fleet.
The Kyiv School of Economics Institute (KSE) provided the list of tankers which belong to the shadow fleet, first in August 2024 and then updated in December 2024. A tanker belongs to the shadow fleet if it is shipping Russian oil, has an opaque ownership structure and no reliable western oil spill insurance.
Many of the oil tankers are owned by single purpose entities based on the Marshall Islands or other tax-friendly jurisdictions. To determine the ultimate beneficial owner company databases, financial records and industry publications have been used.
To define the price for which a vessel was sold, weekly reports by a dozen shipbrokers were used. When no record could be found, or the sale price was not disclosed, the value of the vessel at the time of the sale has been used. This information has been provided by maritime industry data website VesselValue.
Whether a tanker became part of the shadow fleet was checked against data on maritime databases Equasis, IHS Maritime & Trade and vessel tracking websites Global Fishing Watch and MarineTraffic.
You can find all the details of our methodology here.
Protecting the shipping sector
Part of the reason why the EU has been slow in ramping up its sanctions regime for ships is because of internal resistance. Greece, alongside other maritime countries like Cyprus and Malta, has at times frustrated any attempts to ramp up sanctions.
In 2023, for example, the European Commission was suggesting to not only ask shipowners to notify national authorities of ship sales to third countries, but to force them to draw up a contract prohibiting a tanker they sold from ever being used to ship Russian oil. The plan, seen by FTM, did not get the required unanimous support.
In negotiations with other EU countries, the three countries were sceptical of sector-wide sanctions, an EU diplomat from a Baltic Sea country said.
“What they were always raising was that those sanctions will harm their shipping sector, but not the shipping sector outside of the EU,” he said. “And this would mean that the business will simply switch outside of the EU and there would be harm to the EU but no effect.”
The country heavily relies on its shipping industry: with 14 billion euros annually it accounts for almost 8 per cent of the economy. Greece is also the number one country in the world when it comes to owning oil tankers.
This also plays out in Russia’s shadowfleet. The largest number of vessels has been sold by Greek companies: some 55 per cent – or 127 tankers – of all the Western-owned tankers that are now part of the shadow fleet used to be owned by Greek companies.
For Benjamin Hilgenstock, chief economist at research organisation KSE Institute, the fact that companies can continue making money by contributing ships to Russia’s shadow fleet means that the sanctions so far have not been effective enough.
“You can resell the tanker three times in three weeks,” he said. “The companies that sell tankers know what they have to do to avoid trouble.”
But the fact that companies can get around sanctions doesn’t mean that sanctions aren’t effective, EU sanctions envoy O’Sullivan argued.
“There's always going to be a degree of circumvention,” he said. “The question that guides our work is the following: are we slowly but surely making it harder, making it more expensive, making it more complicated, for the Russians to continue their economic activity? And that's the name of the game.”
For now, the ships sold by Greek entrepreneur Kassidokostas-Latsis last autumn continue to generate profits.
At the end of January, the Fos Picasso docked at the Indian port of Mangalore, where the oil has been unloaded and processed. Similarly, the second tanker Fos Da Vinci is currently cruising on the Indian Ocean. It seems to be heading to India as well, where it is likely to unload the oil worth millions of dollars that it is transporting.
Leonie Kijewski contributed reporting.
This article was updated on 04.02.2025 to include a note on methodology and on 24.02.2025 to correct the number of oil tankers sanctioned by Western countries.
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Investigates climate and energy policy, anti-democratic forces within the EU and wishful thinking by European institutes.
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