The shadow fleet has grown exponentially since the start of the Russia-Ukraine war in 2022. By one estimate, around 1,000 shadow tankers operate worldwide, equivalent to 15-20% of the global tanker fleet. These vessels are typically unregulated, circumventing price caps and insurance bans by hiding their identity. Often decades old, they fly flags of convenience from small, under-resourced states and use opaque ownership structures to conceal their true cargo and destination. Their primary purpose is the economic survival of sanctioned regimes, but their secondary effect is a mounting environmental and humanitarian disaster. The gravity of the problem was highlighted by a recent marine incident off the coast of Oman in June 2026. International maritime risk and response company Ambrey was engaged in the salvage of the stricken tanker, the Caroline Bezengi.

The Rise of Shadow Tankers

Shadow tankers emerged as a direct consequence of sanctions on Russian oil exports. Following Russia's invasion of Ukraine, the G7, the EU and allied states imposed a price cap on Russian crude and refined products: Western-owned or insured vessels could still carry Russian oil, but only if it was sold below a set price threshold. Tankers that trade above the cap, or that hide their activities entirely, must therefore operate outside Western insurance and maritime services — a gap the shadow fleet has filled. By concealing ownership, cargo and destination, they allow sanctioned crude to keep flowing while placing the environmental risk squarely on coastal states along their routes.

Case Study: The Caroline Bezengi Disaster

The Caroline Bezengi, a 2001-built Suezmax carrying 800,000 barrels of Russian crude, grounded on the rocks of Oman's Hallaniyat archipelago, inside a marine reserve created to protect endangered humpback whales. Oil has since reached the mainland, with cleanup costs estimated at $200-500 million. The registered owner had already dissolved, its flag state suspended its registry for fraud, and no insurer has come forward to pay the cleanup costs or for the resources engaged in mitigating the environmental damages.

The Insurance Vacuum and the Burden on Coastal States

Legitimate tankers are typically covered by the International Group of P&I Clubs (IG P&I), a consortium of mutual insurers that provides third-party liability cover — including for oil pollution — of up to several billion dollars per ship, backed by a layer of global reinsurance. This is the mechanism that normally ensures prompt spill response and compensation. Had a similar incident involved a vessel insured by one of the IG P&I Clubs, the insurer would have swung into action immediately, taken all possible measures to mitigate the damage, and proactively deployed suitable resources, while also ensuring affected parties and local communities were compensated.

In the Caroline incident, however, the Omani authorities are responding with their own resources, and the response itself could cost hundreds of millions. The struggle to secure a dedicated fund has wasted crucial initial days, and as a result adequate resources are still not being deployed due to this funding shortfall.

The Enforcement Divide: Do Sanctions Make It Worse?

Most countries recognise UN sanctions, but in recent years the US and its allies have increasingly relied on non-UN sanctions, leveraging their grip on the global financial and banking ecosystem that is essential for facilitating insurance coverage of such magnitude.

This approach is undermined by a fragmented global response. Many countries in Asia and Africa recognise only UN sanctions and continue to trade with sanctioned states, whether out of economic necessity or diplomatic choice. This provides safe havens for shadow tankers and enables their operations.

The result is clear: fragmented enforcement does not truly stop the flow of oil; it merely drives it underground, where safety standards and environmental protections become afterthoughts.

Root Causes and the Path Forward

So, are sanctions the root cause? Not solely. The underlying drivers remain geopolitical conflict and the global thirst for oil. But sanctions are undeniably a catalyst. They are a blunt instrument that, while politically necessary, lacks the nuance to prevent collateral environmental damage.

Sanctions may be a legitimate tool of foreign policy, but their environmental and humanitarian side effects are becoming intolerable. The Oman spill is a clarion call, not to abandon sanctions, but to urgently design a parallel system of maritime governance that protects the oceans and the vulnerable communities that depend on them. Without such a framework, the next spill is not a question of "if", but "when".

About the Authors

Danish Shadab holds a Juris Doctor (JD) from Singapore Management University and a Master of Laws (LL.M.) from the National University of Singapore. He has over a decade of professional experience working with one of the world's largest marine salvage companies.

Jaison Kallikkanathu John holds a Master of Laws (LL.M.) from the University of Sydney and a Master of Laws (LL.M.) from King's College London. He has several years of experience as a commercial lawyer, advising on international commercial and regulatory matters across the Middle East and North Africa, Africa, and Asia.

Source: Ship & Bunker