Shadow fleet

Based on Wikipedia: Shadow fleet

Somewhere in the Atlantic right now, an aging tanker is sailing with its transponder switched off. Its hull bears a name that doesn't match any legitimate registry. Its insurance papers reference a company that exists only on paper in a country you've never heard of. And in its hold, it carries Russian crude oil worth millions of dollars—oil that Western sanctions were supposed to prevent from ever reaching global markets.

This ship is part of what experts call the "shadow fleet" or "dark fleet"—a sprawling, improvised network of vessels that has emerged as one of the most significant challenges to international sanctions enforcement in modern history.

What Makes a Ship "Dark"

The term shadow fleet refers to ships that use concealing tactics to smuggle sanctioned goods. But that clinical definition doesn't capture the audacity of the operation. These aren't submarines or stealth craft. They're often decrepit tankers purchased secondhand, sailing under flags of countries that barely have coastlines, crewed by sailors from a half-dozen nations, financed through shell companies nested like Russian dolls across multiple jurisdictions.

The International Maritime Organization estimates that between three hundred and six hundred tankers currently operate as shadow vessels. Many are old—some dangerously so. They lack proper maintenance, carry inadequate insurance, and operate with ownership structures so convoluted that even forensic accountants struggle to trace them.

In October 2023, the International Maritime Organization took the unprecedented step of formally defining what a "dark ship" is. The resolution noted ships with "substandard maintenance, unclear ownership and a severe lack of insurance." It was an acknowledgment that the problem had grown too large to ignore.

The Art of Disappearing at Sea

How does a massive oil tanker hide in plain sight? The answer involves exploiting every gap in maritime tracking systems with ruthless creativity.

Every registered vessel carries an Automatic Identification System, or AIS—essentially a transponder that broadcasts the ship's identity and location. This data is publicly accessible. It's the foundation of modern maritime tracking, the system that lets port authorities, coast guards, and shipping companies know where vessels are at any given moment.

The catch? The system is voluntary. Ships can simply switch it off.

When a shadow vessel approaches a rendezvous point for an illicit transfer, its AIS signal simply vanishes. The ship "goes dark." Later, when it's safely away, the signal reappears—perhaps now showing a different destination, or even a different identity altogether. Authorities can try to match gaps in AIS data with satellite imagery, but with millions of square miles of ocean to monitor, it's like finding a specific grain of sand on a beach.

Ship operators have learned to exploit plausible deniability. A transponder could fail due to technical problems. It might be switched off for security reasons in pirate-prone waters. The system's designers never anticipated it would be weaponized this way.

Iran's shadow fleet has pioneered an even more sophisticated technique called spoofing—broadcasting false location data or flooding receivers with garbage signals to obscure genuine information. Some industry experts have actually defended this practice as a legitimate counter-piracy measure, which is why there's been pressure to keep AIS transmission voluntary rather than mandatory. The fox has convinced the farmer that the henhouse door should stay unlocked.

Meeting at Sea

Once a shadow tanker has loaded sanctioned cargo—say, Russian crude oil—it needs to get that cargo to market. But sailing directly into a Western port would invite seizure. The solution is ship-to-ship transfer.

Out on the high seas, beyond the territorial waters of any nation, the shadow vessel meets a legitimate tanker. The cargo gets pumped from one ship to the other. Now the oil has been "laundered"—it's aboard a properly registered vessel with clean paperwork, ready to be delivered to refineries that might prefer not to ask too many questions about its origins.

A related practice called bunkering allows shadow ships to refuel at sea, meaning they can operate for extended periods without ever entering a port where authorities might inspect them.

Both practices are perfectly legal when conducted properly in regulated waters. But on the high seas—international waters beyond any nation's jurisdiction—they exist in a gray zone that sanctions enforcement struggles to reach.

The International Maritime Organization acknowledged the problem back in 2013, warning that ship-to-ship transfers on the high seas "were high risk activities that undermined the international regime with respect to maritime safety, environmental protection and liability." The warning went largely unheeded.

The Identity Shell Game

Ships, unlike people, can change their names, their nationalities, and their very identities with surprising ease. The shadow fleet exploits this ruthlessly.

Traditional identity tampering involves obscuring a vessel's physical appearance, digital signatures, and registry records. Paint over the old name. File new paperwork. Swap transponder codes. It's crude but often effective.

North Korean vessels have pioneered something more sophisticated: vessel identity laundering. Rather than simply disguising a "dirty" ship, they exploit flaws in the International Maritime Organization's registration system to create entirely new, clean identities from scratch.

Direct identity laundering means registering a sanctioned vessel as if it were a brand new ship, complete with fresh identification numbers. Indirect laundering involves a "clean" ship loaning its identity to a dirty one—the maritime equivalent of lending someone your passport.

Why does this work? Several reasons compound the problem. Companies involved can claim ignorance, which reduces their incentive to conduct thorough due diligence. The International Maritime Organization's registration process doesn't require in-person verification of new vessels. And the various numbering systems meant to track ships—AIS identifiers, Maritime Mobile Service Identity numbers—were designed for convenience, not security.

Flag Hopping

Every ship must fly the flag of some nation. This determines which country's laws apply aboard and which authority is responsible for safety inspections and regulatory compliance. In theory, this should provide accountability. In practice, it creates opportunities for evasion.

Consider a recent case documented by the United States Treasury Department. Of six vessels caught evading sanctions, three were sailing under Cameroon's flag, one under Liberia's, and two under Russia's. When investigators went back to check, every single ship had changed its flag. Six had switched to Cameroon. One had opted for Tanzania.

This is flag hopping—constantly changing registry to stay ahead of enforcement, like a criminal moving between jurisdictions to avoid prosecution.

Flags for Sale

To understand why flag hopping works, you need to understand flags of convenience—maritime registries that impose minimal requirements on vessel owners and exist primarily to generate revenue for their host countries.

About forty nations operate these open registries. They share common characteristics: minimal nationality requirements, low fees, quick registration processes, and limited oversight. Critics argue they prioritize profit over safety, environmental protection, and regulatory compliance.

Panama operates the world's largest ship registry, dating back to 1916. It has been implicated in sanctions evasion schemes involving Russian, Iranian, and Venezuelan oil. Liberia, historically backed by the United States, grew as an alternative to Panama. The Marshall Islands emerged as another major flag state, with its registry actually managed by a private American company.

Recently, there's been movement in this shadowy market. As Western sanctions pressure has increased, dozens of tankers have abandoned Liberian and Marshall Islands flags—both jurisdictions have ties to the United States and face pressure to comply with American enforcement. Panama removed nearly seventy ships from its register. Barbados followed suit in 2025, announcing that forty-six shadow fleet vessels would be flagged out after new British sanctions.

Where do these vessels go? To registries with even less oversight.

Gabon appears to be emerging as a new destination for Russia and Iran-linked tankers. Tanzania, Fiji, and Cambodia have all been flagged as enabling sanctions evasion, particularly for North Korean vessels. Cambodia's ship registry was so problematic it was officially shut down in 2002—yet reports from 2020 show North Korean ships still manipulating Cambodian flags to evade detection.

Perhaps most remarkably, Mongolia operates a flag of convenience despite being completely landlocked. Its lax regulations and quick registration processes have attracted sanctioned operators looking for jurisdictions that won't ask difficult questions.

Why Small Countries Play Along

If flags of convenience enable so much illegal activity, why don't countries simply shut them down?

The answer is money and capacity. Open registries are predominantly operated by small states with limited resources. Registration fees and tonnage taxes provide real revenue. And investing in serious regulatory oversight would cost more than these countries can afford—assuming they wanted to invest in the first place.

Many of these registries are actually run by private companies that operate on behalf of nominally sovereign states. This adds another layer of distance between the flag and any meaningful accountability. Anonymous online registration processes make it easy for sanctioned entities to slip through.

For operators trying to evade sanctions, these registries offer exactly what they need: low fees, minimal paperwork, quick turnaround, and plausible deniability for everyone involved.

Following the Money

Getting sanctioned cargo to market is only half the challenge. The other half is getting paid.

American and European sanctions don't just target physical goods—they target the financial system. Access to the Society for Worldwide Interbank Financial Telecommunication, known as SWIFT, can be restricted. Dollar and euro transactions can be blocked. For a sanctioned country, having oil to sell means nothing if you can't receive payment.

This is why shadow fleets are never just about ships. They're part of a complex ecosystem of financial schemes, shell companies, and alternative payment mechanisms. As one expert on North Korea put it, "long before North Korean vessels conduct ship-to-ship transfers under the cover of night, on-shore operatives go to extraordinary lengths to establish anonymous shell companies, falsify financial and ownership records and bribe customs officials."

The Financial Toolkit

Sanctioned entities have developed multiple strategies to move money around Western financial controls.

Front companies are perhaps the oldest trick. Set up a shell corporation in a non-sanctioned country—somewhere with low compliance oversight and governments that disagree with Western sanctions policy. Conduct business through this entity. Trading partners may not realize, at least initially, that they're actually dealing with a sanctioned state. When the front company gets discovered and hit with secondary sanctions, simply set up a new one.

Currency workarounds offer another avenue. Accept payment in the buyer's local currency rather than dollars or euros. These currencies may be less useful in international markets, but they can still purchase goods within that specific country. And increasingly, alternative financial networks provide ways to move even "weak" currencies around. Iran has developed SEPAM. Russia operates SPFS. China has CIPS. All serve as alternatives to the Western-dominated SWIFT network.

Cryptocurrency has emerged as a particularly useful tool for evading financial sanctions. The relative anonymity of blockchain transactions makes them harder to trace than traditional bank transfers.

Exchange offices—simple currency exchange businesses—can serve as informal banks. One person deposits local currency at an office in one country. Another person withdraws the equivalent in hard currency from a partner office elsewhere. Limited oversight makes these operations difficult to detect.

And then there's the oldest financial mechanism of all: barter. Why deal with money at all when you can simply trade goods for goods? Sanctioned exports can be paid for with requested items, consumer products, or universally valuable commodities like gold.

Why This Matters Now

Shadow fleets have existed for decades. North Korea, Iran, and Venezuela have all operated dark ships to evade international sanctions. But Russia's invasion of Ukraine in February 2022 transformed the scale of the problem.

Western nations responded to the invasion with unprecedented sanctions on Russian oil exports—a commodity worth hundreds of billions of dollars annually that represents a significant portion of Russian government revenue. The logic was straightforward: deprive Moscow of the funds it needs to wage war.

Russia's response was to rapidly build one of the largest shadow fleets in history.

Within months, hundreds of aging tankers were purchased, transferred to opaque ownership structures, and put to work ferrying Russian crude to willing buyers in India, China, and elsewhere. The maritime insurance industry—concentrated in London—was meant to be a chokepoint, since tankers need insurance to operate. Russia found workarounds there too, using unknown insurers or state-backed guarantees.

The result has been a crash course in the limitations of sanctions enforcement. Western nations can decree that Russian oil shouldn't reach global markets. But on the high seas, decrees mean little without the ability to stop, board, and seize vessels—actions that risk escalation and require resources few countries possess.

The Safety Problem

Beyond sanctions enforcement, shadow fleets create genuine dangers.

When ships operate without proper insurance, who pays for oil spills? When aging tankers skip maintenance, who rescues crews when engines fail? When vessels switch off their transponders, how do other ships avoid collisions?

Environmental groups have warned that shadow fleet operations significantly increase the risk of major oil spills, particularly in sensitive waters like the Baltic Sea and the Turkish Straits. A single poorly maintained tanker carrying hundreds of thousands of barrels of crude could cause catastrophic damage to coastlines and marine ecosystems.

The sailors who crew these vessels face risks too. Working aboard poorly maintained ships with dubious safety records, employed by shell companies that might evaporate if something goes wrong, they occupy some of the most precarious positions in global shipping.

Can Anything Be Done?

The International Maritime Organization's 2023 resolution defining dark ships was a first step toward addressing the problem. But the fundamental challenges remain.

Shadow fleets exploit coordination problems between nations. The high seas belong to no one. Flag states have nominal responsibility for their registered vessels but often lack capacity or will to enforce regulations. Sanctioning countries can target specific ships, but the ownership structures are designed to make tracing difficult.

Insurance requirements could theoretically provide leverage—ships need coverage to operate safely and access most ports. But enforcing insurance rules requires knowing who actually insures a vessel, information that shadow fleet operators work hard to obscure.

Satellite tracking and artificial intelligence have improved authorities' ability to detect suspicious behavior—ships that go dark at sea, vessels conducting transfers in unusual locations, tankers that seem to appear from nowhere with fresh identities. But detection is only useful if it leads to enforcement, and enforcement on the high seas remains extraordinarily difficult.

Some experts advocate for targeting the onshore infrastructure that shadow fleets depend on—the shell companies, the complicit registries, the financial networks. This would require unprecedented international cooperation, including from countries that have no particular interest in enforcing Western sanctions.

For now, the shadow fleet continues to operate. Ships go dark, cargoes change hands at sea, money moves through channels designed for anonymity. The system that was supposed to punish Russia for invading Ukraine has become instead a masterclass in how determined actors can work around the rules of international commerce.

The ocean, it turns out, is still very large. And in its vastness, there's plenty of room for ships that prefer not to be seen.