Dark clouds over the shadow fleet. Windward alerts governments before a maritime disaster occurs
By Despite sanctions, millions of barrels of crude oil are being illegally transported through new sea routes. Thousands of tons of crude oil are being transhipped between tankers. Operators have no problem loading and transhipping crude oil and then selling it as “legal” cargo. Ships change flags, owners, and names, fly under false flags, and often sail with AIS systems disabled.
According to some estimates, the shadow fleet currently numbers 1,400 vessels. The Kyiv School of Economics estimates that Russia alone has invested nearly $10 billion (€9.26 billion) in creating a shadow fleet of several hundred vessels, which in July 2024 was estimated at nearly 600 tankers.
These actions by the Russian state, along with the gradual transfer of ship ownership to the UAE, where state regulations are less stringent, will likely result in a further increase in the number of ghost fleet vessels, predicts Francesca Fairbairn, Oceans, Commodities, and Academy Programme Manager at the Institute for Human Rights and Business (IHRB).
Before a Major Disaster
Since 2022, ghost fleet tankers have been involved in as many as 50 incidents. The straits between Denmark and Norway, the Bosphorus, and the Suez Canal are particularly at risk. An accident or collision involving a ghost fleet vessel could happen anywhere, and some senior shipping industry figures say it’s “only a matter of time” before a major disaster occurs, warns Francesca Fairbairn.
An example of the voyage of an LNG tanker, which was likely involved in the LNG trade from Russia to the EU following the unclear events in Russia and a port call in Belgium. Source: Windward Maritime AI™ Platform
Operations in the secondary market for sanctioned tankers and the recyclers that purchase them use dirhams (AED), the currency of the United Arab Emirates. This is done to avoid payments through the US Clearing House Interbank Payments System, which settles all transactions in US dollars. However, this method of masking transactions in the shadow fleet market is slowly being phased out, according to Jonathan Boonzaier of Trade Winds, citing Bloomberg reports.
Bloomberg, in a report published on Thursday, detailed the inner workings of the May transaction involving the US-sanctioned 46,200 dwt product carrier Contract II (built in 1996), which was sold for scrap in a deal worth AED 14 million (United Arab Emirates Dirhams, or $3.81 million).
UAE banks are tightening their policies, replacing dirhams with dollars in ship recycling transactions involving shadow fleet vessels. The ship arrests in India demonstrate that lenders are halting transactions involving sanctioned vessels, according to Boonzaier.
Shadow Fleet Operations in the Baltic and Beyond
The main waters in which “shadow fleet” vessels operate, employing deceptive practices to evade sanctions and monitoring, are the South China Sea, particularly around Malaysia, as well as the Mediterranean and Black Sea. These vessels, of course, operate in the North Sea and are also registered in the Baltic. They also operate in the Persian Gulf and the Strait of Malacca.
These locations are often located near exclusive economic zones and safe bays or islands where ship-to-ship (STS) oil transfers take place. Significant shadow fleet activity has also been recorded around Crimea and the Sea of Azov.
Windward recently conducted detailed surveillance of shadow fleet activity near the Riau Archipelago. As many as 80 sanctioned tankers or high-risk vessels were found operating simultaneously in this region. Nearly 40% of these vessels transmit false signals or fly unknown flags.
“These ships undermine the global integrity of international trade and threaten the rules-based order,” says Michelle Wiese Bockmann, maritime intelligence analyst and expert in the ‘shadow fleet’ at Lloyds List.
Dark fleet tankers are gathering at the maritime epicenter of lawlessness off the coast of Malaysia, with exclusive economic zones (EEZs) marked in blue and territorial waters in purple. Source: Windward Maritime AI™ Platform
Shadow tankers in the Riau Islands region
Bockmann emphasizes: “We need to speak more about what’s happening near the Riau Islands and what is (not) being done about this serious threat to maritime safety, security, and the environment. Everyone knows that this long-standing coastal hub for dark fleet tankers is being used to secretly store and transfer sanctioned oil from ship to ship.”
Currently, this waterway “has transformed into an epicenter of maritime lawlessness, harboring sanctioned tankers without insurance, flags, or valid safety and seaworthiness certificates. Widespread illegal activity and GNSS manipulation now pose a serious navigational threat near international shipping lanes used by hundreds of ships daily,” Bockmann warns.
• 108 vessels have been sanctioned, and an additional 62 have been classified as high-risk tankers due to various fraudulent shipping practices.
• 28 vessels, with an average age of 21 years, were involved in suspicious operations. Of these, 82% are sanctioned by Western regulators, and 36% were falsely flagged.
• At least 14 tankers were involved in location manipulation (GNSS shutdowns or disruptions). As many as 80% were sanctioned, and 57% were falsely flagged.
• Operators of 52 vessels They conducted ship-to-ship oil transshipments. Of this group, 75% were sanctioned or assessed as high-risk.
Windward Maritime emphasizes that “Although the waters where these tankers are located lie outside Malaysia’s territorial seas, they conduct STS operations within its exclusive economic zone.” It emphasizes that “Foreign-flagged vessels may navigate this water but are prohibited from conducting unauthorized commercial activities (such as ship-to-ship transfers).”
According to the MARPOL Convention, tankers planning to conduct STS operations in the territorial sea or exclusive economic zone of a MARPOL party must notify the maritime administration at least 48 hours in advance, Bockmann reminds.
The Malaysian government has promised to crack down on illegal activities in the area since August of this year. Some of the vessels registered with Windward Maritime have been tracked in the waters of Singapore and Malaya, where they were conducting STS transshipments. One of them was even reportedly located at a shipyard. This is despite the fact that, as of January 10, 2025, 35% of the 669 tankers in the shadow fleet carrying Russian, Venezuelan, and Iranian crude oil have been subject to US, UK, or EU sanctions.
The US-sanctioned tanker Long Range 1 Roc falsifies its location off the coast of the Riau Archipelago, falsely claiming to be Panama-flagged. Source: Windward Maritime AI™
OFAC targets ship-based criminals
In response to the activities of shadow fleet operators and criminal activities, the US Treasury’s Office of Foreign Assets Control (OFAC) has imposed restrictions. The US administration is taking a series of administrative actions to eliminate high-risk vessels from the market. US regulators are tightening scrutiny of local entities supporting sanctioned oil transfers related to trade with Iran.
Since March 2025, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has imposed sanctions on a Malaysian oil trader, Indonesian tugboat operators involved in ship-to-ship transfers, and a Singapore-based company that provided cargo inspection and certification services.
OFAC has made clear that any company involved—directly or indirectly—in facilitating the trade or transportation of sanctioned crude oil may be subject to enforcement action. False-flag tankers operating off the coast of the Riau Islands have been identified based on false registrations in countries including Aruba, Benin, Curaçao, Eswatini, Malawi, Guinea, Guyana, and Sint Maarten, according to Windward Maritime AI™.
Shadow Fleet Statistics (Grey Fleet + Dark Fleet). Source: Windward Maritime AI™
Malaysia plans to introduce new regulations on July 31st prohibiting unauthorized transfers of STS crude oil within its exclusive economic zone. Vessels that do not obtain prior permission will be detained. This decision follows public statements by the Malaysian Foreign Minister at the ASEAN Foreign Ministers’ Meeting, signaling a desire for stricter regulations.
Shadow fleet vessels are usually old and do not meet technical safety standards. They also pose a threat to the crews operating them. Finally, they are dangerous to other vessels and critical installations along their route. They generally do not comply with the standards of the International Oil Companies Maritime Forum (OCIMF) or the Maritime Labor Convention. An additional threat to other vessels is sailing with their Automatic Identification System (AIS) disabled. Fortunately, “invisible” vessels are under surveillance by security forces. But they are far from being completely eliminated from the market.