Maritime shadow fleet: formation, operation and continuing risks

13. June 2025

By Jeremy Domballe, Maritime Product Director, Anna Koldova Sr. Principal Research Analyst, Max Lin, Principal Journalist, Byron McKinney, Director, Product Management, Ines Nastali, Senior Supply Chain Analyst at S&P Global Market Intelligence and S&P Global Commodity Insights.

A shadow fleet of vessels emerged as a result of Russia stating its intention not to work or cooperate with the price cap. This action led to a number of established vessel operators exiting the Russian oil trade. Consequently, new shippers had to be found in order to continue transporting pre-2022 Russian oil production output. New shipping companies were setup in locations such as India, the United Arab Emirates and Hong Kong, new partners and buyers of Russian oil were found, and new insurance firms were created to offer protection and indemnity to the shadow fleet of ships.

S&P Global Market Intelligence originally documented a shadow fleet estimate in May 2023 and produced a follow up in May 2024 in respect to Russian oil. The number of vessels in the shadow fleet since 2023 has risen steadily, and oil exports by vessels deemed to be within the shadow fleet of ships continue to divest from the use of formally covered services.

A recent S&P Global Commodity Insights report noted more than 80% of Russian exports are potentially shipped outside of the Group of Seven (G7) countries’ oil price cap. Additionally, Iranian oil exports to mainland China continue to be delivered in record numbers in early 2025. Russian and Iranian cargoes are often transported using tactics to hide the real origin of the shipment, such as multiple ship-to-ship transfers. Despite regulatory action, the shadow fleet continues to operate across Russian, Iranian and Venezuelan oil cargoes.

An increasing focus in 2025 on Iranian oil cargoes exported to the Far East by shadow fleet vessels has received extensive attention by US authorities and has resulted in a “maximum pressure” approach to reduce these exports to zero. The recent sanctioning of Chinese “teapots,” (small, independent refiners) such as Shandong Shouguang Luqing Petrochemical Co. Ltd., for purchasing Iranian oil is a significant escalation by the US in seeking to choke Iranian oil at the refining stage and not just at sea. Further action on Iran and the shadow fleet servicing its oil shipments are likely to continue.

The shadow fleet, therefore, remains an important topic for consideration in 2025, especially for those undertaking vessel compliance. Not knowing the group owner of a vessel or fleet of vessels poses a degree of risk. Equally, the ability to determine the origin of oil and to understand restrictions on Russian oil entering an EU port, either directly or via a ship-to-ship (STS) operation, are requirements placed on maritime-associated firms. The need to identify the shadow fleet and be aware of its actions are hugely important when a Russian nexus to a vessel or firm is no longer obvious.

Firms operating within and close to the maritime industry need to remain vigilant to the formation and operation of the shadow fleet in 2025.

For more information: https://pages.marketintelligence.spglobal.com/8759-Maritime-shadow-fleet-2025-CD-Request.html