New Sanctions for Putin’s ‘Shadow Fleet’ Are on the Horizon
EU is ready to roll out barriers on vessels transporting illicit oil, but Trump administration has yet to say if U.S. will join the effort
The European Union is preparing new sanctions aimed at limiting the Russian “shadow fleet” that transports illicit oil, but it has yet to hear if the Trump administration will join it in targeting the vessels that provide a crucial source of revenue for the Kremlin’s war in Ukraine.
The illicit tanker fleet sprang up to evade Western sanctions on Russian oil, allowing Moscow to move crude to buyers in India and China by flagging ships in countries such as Gabon. The U.S. Treasury Department in the waning days of the Biden administration sanctioned 183 vessels used by Moscow.
The Trump administration hasn’t dialed back on those sanctions, and it is considering targeting dozens more vessels, people familiar with the matter said. There has been no decision yet, and the administration is still studying various sanctions options, they said.
The White House declined to comment.
The EU had readied a sanctions package that would roughly double the number of third- country vessels it would blacklist for carrying Russian oil, according to diplomats briefed on the discussions. Final approval from EU member states has yet to take place, and officials will meet Wednesday in hopes of reaching agreement.
The U.S. hasn’t yet given any indication of whether it will join the EU in the sanctions, as it typically did during the Biden administration.
In an interview with The Wall Street Journal this past week, Vice President JD Vance said the U.S. could pressure Russia using economic or military “tools of leverage” if Moscow didn’t agree to a peace deal with Ukraine. He didn’t spell out the details of what those tools would be.
Daniel Fried, a retired U.S. diplomat who coordinated sanctions policy against Russia during the Obama administration, said additional measures targeting the shadow fleet could be a “relatively low risk” way of increasing the impact of a regime already announced by the Biden administration.
“It needs to be enforced,” said Fried, who added that only a fraction of the vessels now engaged in the illicit trade have been sanctioned. “The Europeans would support it. It would be a signal that Trump isn’t going to cave to Putin, and not be Putin’s patsy.”
EU officials are in the final stage of agreeing to list more than 70 vessels from Russia’s shadow fleet with a decision expected to be taken formally when foreign ministers meet Feb. 24, the third anniversary of Russia’s full-scale invasion of Ukraine.
By mid-December, the bloc had banned 79 vessels from entering EU ports and from a range of European shipping services, as well as imposing sanctions on shipping responsible for transporting Russian crude oil or oil products.
Enforcing sanctions against Russia’s shadow fleet has presented logistical and legal challenges.
The vessels conceal their role in shipping oil by using deceptive tactics. They fly flags of convenience, register ownership with tax havens, switch off their radio signals to obscure their movements and frequently transfer cargo to other ships. Their numbers range from 400 to 1,400, depending on estimates. A precise tally is probably impossible to determine.
While Trump has lately talked tough about his plans to push Russian President Vladimir Putin into a peace deal, former advisers fear he might not pursue serious action.
Trump said this past week that he had a “lengthy and highly productive phone call” with Putin. It was the first publicly announced call since Inauguration Day with his Russian counterpart. Trump said after the call that negotiations would begin soon to resolve the war in Ukraine.
He also announced a U.S. negotiating team that would include Secretary of State Marco Rubio, Central Intelligence Agency Director John Ratcliffe, national security adviser Michael Waltz and Middle East special envoy Steve Witkoff.
While Trump’s team hasn’t outlined a peace plan for Ukraine yet, it appears to be assembling one. Retired Lt. Gen. Keith Kellogg, his Ukraine emissary, met with European leaders this past week at a security conference in Munich.
When Russia invaded Ukraine three years ago, the Biden administration enacted sweeping sanctions against Russia, but balked at seriously targeting its oil exports to avoid causing a global surge in petroleum prices. Some signs of an oil glut could be giving the Trump administration room to maneuver. Oil and gas revenue has accounted for more than a third of Russia’s federal budget in recent years.
The EU worked closely with the U.S. under the Biden administration and other Group of Seven countries, including the U.K., on the vessel-sanctions packages. Some European countries had long chafed at the Biden White House’s reluctance to crack down harder on the shadow fleet over fears of driving oil prices higher before the November election.
European officials said there has only been limited discussions between Brussels and the U.S. over sanctions since Jan. 20, when Trump returned to the White House.
Using economic levers against Russia is appealing to Trump, who has criticized billions of dollars in military aid going to Ukraine and promised to negotiate a quick end to the war. Trump has appeared increasingly impatient with Putin, who has so far said he is willing to talk, but shown little inclination to end the war.
Trump sounded a warning against Putin days after he was sworn in as president last month, writing on Truth Social that he would enact sanctions if Putin didn’t end the war. “We can do this the easy way, or the hard way,” he wrote.
Russia has invested $10 billion since 2022 to expand its shadow fleet, according to calculations by the Kyiv School of Economics. More than 70% of Russia’s seaborne oil exports have been transported using such vessels, it said.
Kellogg, the Ukraine envoy, last month suggested that bringing world oil prices down to $45 a barrel would be enough to force the Kremlin into a deal. Trump himself has caused world oil prices to soften by publicly prodding Saudi Arabia, which has excess capacity, to pump more to bring down prices.
Few expect that the U.S. could arrange such a precipitous price drop without the help of the Saudis, who are disinclined to embark on such a move.
Such an effort could also carry significant risks. While it would strain Russia’s economy, it might also destabilize oil-dependent economies in the Middle East and Africa. It might also discourage investment in U.S. domestic energy production.
The U.S. proposals have been watched warily in the Kremlin, whose reliance on oil-export revenue has long been an Achilles’ heel to its national-security state. The Soviet Union’s finances were devastated by a collapse in oil prices during the 1980s, and Putin’s own rise to power in the early 2000s was in many ways facilitated by an oil-price recovery.
The Kremlin effectively parried many of the economic sanctions early in the war by redirecting trade toward partners such as India and China and imposing currency and financial controls. But Russia’s economy is facing headwinds of rising inflation and a worsening labor shortage due to the demands of the Ukraine war. Economists said a decline in living standards could affect ordinary Russians severely this year or next.