Reaction time

Russia is violating hydrocarbon sanctions introduced because of Moscow’s continued occupation of Ukraine. A new initiative by the UK-led Joint Expeditionary Force may help to combat Russia’s illicit oil exports.

It was easy enough to see that the MV Eventin was not doing much in the Baltic Sea on the marinetraffic.com vessel tracking website. As of 11 January 2025, the Panamanian-flagged oil tanker appeared to have lost all power and steering, stuck in Germany’s territorial waters. Tugboats had reached the scene and secured the stationary ship. However, the MV Eventin was not perhaps all she seemed. Consider her voyage: According to marinetraffic.com she left the Russian port of Ust-Luga, on the Baltic coast close to the Russo-Estonian border on 7 January 2025.

The website revealed that she was heading to Port Said on Egypt’s Mediterranean coast, at the mouth of the Suez Canal. At the time of writing, she had been detained by German authorities, reportedly due to her drifting off course and being unable to manoeuvre, and towed to Sassnitz on Germany’s Baltic coast, where she has remained since, along with her cargo comprising 99,000 tonnes of crude oil.

This cargo may be far from innocent. On 11 January 2025, the German government hinted the ship maybe part of Russia’s so-called ‘shadow fleet’ used to circumvent sanctions. Russia has been subject to sanctions on her oil exports since her full-scale invasion of Ukraine in February 2022. In September 2022, the G7 group of industrialised democracies, which includes the EU, agreed a price cap on Russian oil and petroleum exports. The price cap was intended to restrict Russia’s ability to finance its war in Ukraine through the sale of hydrocarbons. The price was set at USD 60 per barrel for oil transported by sea; while oil transported through land pipelines was left exempt. The extent to which these sanctions have been successful in reducing the money Russia has to continue fighting are debatable. Nonetheless, one consequence is that Russian oil exporters are using the shadow fleet to evade such oil sanctions.

Shadow fleet

Russia is working hard to outflank the EU and G7’s hydrocarbon export sanctions. Part of Moscow’s approach has been to establish a shadow fleet of ships which “(make) use of flags of convenience and intricate ownership and management structures while employing a variety of tactics to conceal the origins of (the ships’) cargo”, according to a briefing on this subject written for the European Parliament. Sanctions covering the Russian oil sector prevents G7 members from “providing shipping, brokering, technical assistance or insurance services to facilitate the trade of Russian crude oil and petroleum products across the globe, unless the trade is verifiably below the price cap”, the briefing continued.

The issue for Moscow is that the price cap is supposed to prevent Russia from benefiting from fluctuations in the global oil price. Should the price fall below USD 60 per barrel, Russia will make a profit, but her oil will be comparatively more expensive. On the other hand, Russia cannot benefit from typical increases in the global price of oil. The statista.com website noted that the average per-barrel price for Brent Crude, the international standard benchmark, was USD 80.53 in 2024. Moscow was thus selling oil at a loss last year. The European Parliament briefing noted that G7 members dominate the global market for shipping services and maritime insurance. For example, Lloyds of London remains the world’s leading marketplace for marine insurance. G7 member companies are prevented by sanctions from providing Russian oil exporters these services and insurance.

Russian exporters are thus forced to look beyond G7 member nations for shipping services and marine insurance. One approach taken by the exporters is to charter vessels from so-called ‘flag of convenience’ states such as Panama. Ships registered to these states may benefit from a relatively lax enforcement of vessel safety or environmental regulations, the European Parliament briefing says. Vessels may not maintain adequate insurance, may avoid inspections, and may have poor crew safety and welfare standards. Shadow fleet ships may also have highly opaque ownership and management structures. Just as billionaires undertake efforts to conceal the location of their wealth to avoid tax, so ship owners can hide behind front companies.

As the briefing notes, the key motivation for Russia’s shadow fleet is to “continue trading Russian oil at market prices by avoiding G7/EU vessels, ports and financial and maritime services.” Analysis by Kyiv School of Economics estimates Russia may have spent circa USD 10 billion since March 2022 on the shadow fleet. Up to 90 tankers owned by Sovcomflot, Russia’s largest shipping company, are thought to have had their management relocated to countries such as the United Arab Emirates. Another technique involves buying ships that had Protection and Indemnity (PI) insurance from the International Group (IG). PI insurance is mandatory for vessels navigating through international waters. The insurance covers the harm the ship might do to the environment, people and/or property should she sink, for example. The IG is a network of PI providers funded and managed by shipowners. Up to 90% of global shipping tonnage is provided by the IG. The shadow fleet buys vessels that did hold PI insurance from the IG, but which are now beyond the insurable age limit of 15 years. The report says that Russia also buys ships older than 20 years. Buying old vessels may help to keep the financial exposure of the owners to a minimum should the ship be impounded for sanctions busting: An older ship is cheaper to buy than a new ship, and less of a loss if impounded and eventually scrapped.

The problem with Russia’s shadow fleet is that its ships may be unsuitable for hydrocarbon export. Vessels may be kept in an inadequate state of maintenance meaning they might be unseaworthy. This raises the danger that tankers could suffer mechanical problems, which may have been the case for the MV Eventin. Crews may also have inadequate levels of training, and working conditions may be unconducive to personnel working in a safe and responsible manner. These factors could cause shadow fleet ships to experience difficulties or even court disaster. A badly-maintained and crewed vessel is more likely to sustain damage that could risk the release of large volumes of oil into the sea. Opaque vessel ownership structures, and inadequate insurance, could make it difficult, if not impossible, to determine who is responsible. This could hamper efforts to hold people or organisations criminally or financially liable.

Chasing shadows

Fortunately, it is becoming increasingly difficult for merchant vessels to hide nefarious activities. G7 members are deepening their abilities to keep tabs on what ships are doing on the high seas. All vessels need to carry radars for navigation and radio communications. Merchant shipping uses very high frequencies (VHF) of 156-157 MHz, and 156-162 MHz, reserved by the International Telecommunications Union (ITU) for radio communications. The ITU is the UN body which globally regulates the radio spectrum. The ITU also makes several ultra-high frequency (UHF) wavebands from 457.525-467.825 MHz available for marine radio communications. Ships can use high-frequency (HF) radio across frequencies of 4-8.815 MHz. Medium-frequency communications on wavebands of 405 kHz to 2.850 MHz supplement HF. Satellite communication (SATCOM) is used extensively by merchant shipping. A myriad of service providers including Thuraya, Iridium and Inmarsat use SATCOM frequencies spanning from 1.525-1.646 GHz. Ships need navigation radar which typically transmit radio signals in S-band (2.3-2.5 GHz/2.7-3.7 GHz) and X-band (8.5-10.68 GHz).

Vessels displacing 300 tonnes or more are obliged by the International Maritime Organisation (IMO) to use the Automatic Identification System (AIS). All passenger ships regardless of size on international passage must also use AIS. The AIS transmits a host of information about a ship and her voyage to AIS receivers in range. Information can include the ship’s identity, details of her voyage and cargo, and her location. The vessel’s position is usually derived from her global navigation satellite system (GNSS) receiver. The receiver calculates the ship’s location by using incoming position, navigation and timing (PNT) signals transmitted by a GNSS satellite constellation. AIS information is sent by the ship across VHF frequencies of 161.975 MHz and 162.025 MHz. This information may reach an AIS receiver co-located on a coastal surveillance radar antenna. As the antenna detects and tracks targets at sea, corresponding AIS information regarding those targets is overlaid on the radar screen. One shortcoming of AIS data is that it must be set by the crew. This means that false information can be intentionally or accidentally input. AIS transponders can also be switched off as a safety precaution. This may be necessary if a vessel is navigating through an area with a high risk of piracy. Advertising her voyage and/or cargo in such areas via AIS transmissions could be risky.

All these radio emissions from a merchant ship can be detected with an Electronic Support Measure (ESM). The ESM could be located at a coastguard station, equip a vessel or maritime surveillance aircraft or even be onboard a satellite in space. The system will detect radar communications, radar and AIS transmissions, provided the vessel is in a line-of-sight range from the receiver. At the very least, the ESM will detect a bearing from itself to the source of the transmission. Find the source of the transmission and you find the vessel. The ESM may be able to triangulate the source of the transmissions, giving even more detailed information on the ship’s location. The first indication that a vessel maybe acting suspiciously is that its AIS maybe switched off or transmitting false information. It may make sense to restrict AIS transmissions transiting through the Gulf of Aden, a piracy hotspot, but inactive or inaccurate AIS data may seem more suspicious in the relatively peaceful Baltic. For example, a vessel’s AIS may indicate that she is underway off the coast of Chile, carrying a cargo of timber bound for the Chilean port of Concepción. Yet closer inspection by a maritime surveillance aircraft may reveal the ship is in fact in international waters close to Rostok on Germany’s Baltic coast, and resembles an oil tanker.

Baltic monitoring

Given Russia’s desire to flout oil sanctions using potentially unsafe vessels in European waters, the UK Government announced in January 2025 it was activating the Joint Expeditionary Force (JEF) Reaction System. According to the government, the JEF is “a pool of high readiness, adaptable forces … designed to enhance the UK’s ability to respond rapidly, anywhere in the world, with like-minded allies, or on behalf of international organisations such as the UN or NATO.” The UK leads the JEF, which includes Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Norway and Sweden. The JEF’s primary goal is “protecting northern Europe”. The new reaction system is to “track potential threats to undersea infrastructure and monitor the Russian shadow fleet”.

The Baltic Sea has witnessed multiple instances of critical underwater infrastructure (CUI), such as undersea cables, being damaged, likely deliberately by ships which may form part of the shadow fleet. For instance, on 25 December 2024, the Estlink-2 electricity cable linking Finland to Estonia suffered a power outage. The incident occurred shortly after the MV Eagle S oil tanker had crossed over the cable. The ship was travelling from Ust-Luga in Russia, carrying petroleum, possibly either to Türkiye or Egypt. The Finnish authorities impounded the ship and crew which, as of mid-January 2025, remain in the Finnish port of Porvoo Anch. The MV Eagle S is reportedly registered in the Cook Islands, a flag of convenience state, and is operated by a company registered in the UAE.

The JEF Reaction System will also track suspicious vessels using AIS data alongside other data “from a range of sources”, according to a statement regarding the initiative published by the UK government on 6 January 2025. The system will use artificial intelligence (AI) software to analyse and aggregate data from these disparate sources to build up as accurate a picture as possible regarding a vessel’s identity, voyage and behaviour. UK MoD sources shared with the author that the reaction system is built around a computer programme which uses AI software licensed from Palantir Technologies. The computer system forms part of the JEF headquarters based at the UK’s Permanent Joint Headquarters (PJHQ) in Northwood, northwest London. The MoD declined to provide additional detail on the other data sources that feed into the JEF Reaction System. However, the source continued that other sources the system could draw upon include publicly-listed details about individual ships. Should a vessel be determined as operating suspiciously, a notification is generated which can be checked and shared with JEF members. Personnel from JEF nations are based at the PJHQ, so the sharing of information is easily done. Nations can then take appropriate action regarding the vessel.

The JEF Reaction System will not stop the activities of Russia’s shadow fleet by itself, but it will help to ensure that G7 members can continue to apply pressure to Moscow’s illicit oil exports. Data from the system may also prove useful in future legal action concerning shadow fleet activities. It is reassuring that, despite the damage it may have caused, the MV Eagle S is languishing in a Finnish port. Finnish law enforcement is reportedly investigating the crew. Meanwhile, the MV Eventin seems unlikely to complete her voyage anytime soon. In the long game of combating Russian oil sanctions evasion, initiatives like the JEF Reaction System will prove invaluable.

Thomas Withington