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Splash investigation pinpoints the true scale of the shadow tanker fleet

Splash investigation pinpoints the true scale of the shadow tanker fleet
Sam Chambers February 23, 2023

One of the most discussed, debated questions in shipping these days is the size of the so-called dark or shadow fleet, the vast array of tankers that are travelling the world’s oceans under the radar, trying to avoid sanctions. To existing sanctioned countries such as Venezuela, Iran, and North Korea, a very substantial name has been added over the past year, the world’s largest country, Russia.

Figures banded around in this month have varied massively on the size of the shadow tanker fleet, ranging from around 300 ships to commodity giant Trafigura’s estimate of 600 vessels.

Today Splash can reveal its own detailed investigation into the scale of this growing phenomenon following an extensive, detailed analysis of the global merchant fleet.

Following weeks of work alongside industry sources, Splash has found the shadow tanker fleet – as of Monday – totalled 421 ships. For dirty tankers, this comprises 150 aframaxes, 49 suezmaxes and 104 VLCCs, while on the clean front, Splash has counted five handies, 17 LR1s, three LR2s, and 93 MRs.

The methodology of the research started with the Iranian-linked tanker list compiled by the non-profit United Against Nuclear Iran. On top of this, Splash analysed which ships changed class from the main, Western societies to Indian and Chinese class societies over the past 12 months. Additionally, our analysis looked at special surveys due for more than six years, giving an indication on how prolific an owner is. Most class societies withdraw ships if they do not comply with the five-year special survey rules. Ownership was then checked via the free database Equasis.

Further checks were also made via the International Group of P&I Clubs online ship search function, while also using data from Intertanko. Using multiple sale and purchase documents, Splash also compiled every vintage tanker that has changed hands over the past 12 months at high prices to undisclosed buyers, while also tracking every single ship that has loaded in Russia since sanctions, both clean and dirty, started in recent weeks. Splash researchers were careful to distinguish between what we have termed Russian lifters loading under the approved price cap at this point of the study. Matching all of this information gives Splash the number of 421 active tankers above 10,000 dwt.

With the available data, Splash then worked out whether the accumulated shadow fleet was sizeable enough to carry Russian exports to their new, further away destinations. Splash analysis suggests Russia now has access to more than enough crude tankers, but its clean fleet availability is barely enough to meet its export goals.

The incredible bull-run tankers have enjoyed in the 12 months since Russia invaded Ukraine has seen the stocks of many listed tanker firms quadruple in value, while prices for vintage tankers have hit historic highs as well as breaking records in terms of sales volumes.

Clarkson Research’s secondhand tanker price index has recorded its sharpest-ever upwards movement over the last year, rising by 52% to the highest level since 2008.

The result of the growing shadow fleet has been an ageing of the tanker fleet calling on Russian ports. For example, in January 2022, 40% of the aframax voyages ex-Russia were done on tankers that were younger than 10 years and only 28% on vessels that were older than 15 years, according to data from Poten & Partners. No vessels older than 20 years were utilised. By December, this age profile had changed dramatically: Only 22% of the aframaxes were less than 10 years old and 50% were over 15 years old. Several voyages were performed on vessels older than 20 years and one aframax employed was older than 25 years.

The growing use of the dark fleet is resulting in accidents such as the grounding of the Young Yong VLCC in Southeast Asia (pictured). With Russia joining Iran and Venezuela in seeking vintage tonnage to shift cargoes as sanctions rain in, and major class societies, managers, and insurers shunning former clients in Moscow, substandard tonnage is running into trouble at many destinations around the world, exacerbated by increased use of ship-to-ship transfer operations.

“P&I Clubs are scratching their heads because this is not about breaking compliance rules, but about raw, naked accident risk and oil on feathers which will set decent shipping back to 1990,” said one shipmanagement source in conversation with Splash today on condition of anonymity.

The United States and the European Union will impose new sanctions and export controls on Russia in the coming days, US deputy treasury secretary Wally Adeyemo said earlier this week.

Adeyemo said among a host of new sanctions, there would be a focus on stemming the volume of transhipped oil.

Sun Ship Management is set to join the European Union’s blacklist, following the actions of the UK, US, and Canada who have already imposed sanctions on the company. Sun Ship Management is a Dubai-based subsidiary of Sovcomflot, Russia’s state-backed shipping company, who manages a fleet of over 90 product, crude, and chemical tankers. Sovcomflot has already been blacklisted by the US, EU, UK, and Canada but as the war continues, countries are growingly apprehensive towards their Dubai-based subsidiary.

“Dubai has become a hotbed for companies controlling shadow tankers and the sanctioning of Sun Ship Management would undoubtedly create more hurdles for Russia moving its barrels,” BRS stated in a recent tanker report.