Dark Fleet Facilitators Bribing Flag States To Ignore Their Operations, Paris MoU Report Reveals

A new report from one of the world’s top shipping inspectorates has warned that the dark fleet facilitators are trying to persuade flag states to ignore operations.

The Paris MoU conducted its 57th committee meeting in Madrid earlier in May and has released the details of what was discussed, including the information that some flag states are now trying to devise advanced strategies to avoid detentions.

The Paris MoU, one of the world’s top two port state control bodies, described the recent attempts by many unspecified flag states to conclude bilateral deals with port states to prevent detentions.

The sudden growth of the dark fleet in the wake of the ongoing war between Russia and Ukraine has encountered several previously obscure flags double/triple in size.

The International Maritime Organization recently urged the flag states to crack down on shadow tankers’ unlawful activities and levy regulations on ship‐to‐ship operations.

It also requested the port states to subject probable shadow vessels to more stringent inspections.

However, fighting against the unlawful trade of Iranian and Russian oil is proving difficult as smuggling networks deploy more sophisticated tactics.

There is also a continued demand for discounted oil, particularly in Asia.

Written evidence shared with the UK parliament by the International Group of P&I Clubs last month warned that the oil price cap, introduced 17 months ago to reduce Russian revenues, is not working.

Britain’s politicians have reportedly been holding an inquiry to examine how the sanctions against Russia are going.

The International Group, comprising 12 P&I clubs that cover over 85% of world tonnage, warned in the past month that 800+ tankers have departed from the books since the cap came in, with the rule’s attestation initiative coming in for criticism.

The cap permits traders, charterers, shipowners, and financial services providers to engage in the sale, purchase and carriage of Russia’s oil and oil products by sea, provided the sale price of Russian oil or oil products are sold below or at the price stipulated by G7 and the coalition of states.

Evidence of the sale price of these products is based on a procedure of attestations, which must be provided by the oil products trader.

The attestations might or might not offer accurate price information, exposing insurers and shipowners to allegations that they’ve breached the rules, the International Group argued, stating that:

The attestation is a flawed regime that exposes the P&I Club and a shipowner, operator, and charterer to a cap breach.

The insurers further warned that this price cap appears unenforceable as more vessels and linked services are part of the shadow fleet.

Moving Russian oil via Europe has come under far more intense scrutiny in recent weeks.

The bloc is widely expected to take further measures against the so-called shadow fleet when the EU sanctions are unveiled shortly.

In the southeast of the continent, the Greek navy has made ship-to-ship transfers almost impossible at one of the critical European destinations for these activities.

Since May 1, referring to military exercises, the Greek navy has closed an area in international waters southeast of the Peloponnese islands, six miles off the Laconia coast.

This patch of water has witnessed Russian-linked tankers dot its horizon over the past few years.

In the north of Europe, in the meantime, littoral states around the Baltic, headed by Sweden — the new NATO member — are initiating a diplomatic campaign to get other nations to back a more extensive crackdown on Russia’s shadow fleet passing via the region, concerned regarding the potential for ecological catastrophe with several near disasters reported among the ageing tanker fleet over the past one year.

The EU’s foreign ministers have been liaising with their G7 counterparts regarding upcoming shipping-specific sanctions.

Global insurer Allianz issued an annual shipping report that mentioned that much of the shadow fleet is likely to be poorly maintained and might not have undergone proper inspections.

Shadow tankers also take part in the dangerous practice of ship‐to‐ship transfers in the open oceans and switch off their AIS transponders to obscure their identities.

According to Allianz, these vessels have reportedly been involved in over 50 cases, including massive fires, engine failures, abrupt collisions, unexpected loss of steerage, and even oil spills.

Despite the efforts to crack down on the vessels, the number of tankers is increasing, and we’ve witnessed several groundings and collision cases.

As long as the sanctions continue on nations like Iran and Russia, the shadow fleet seems like it is here to stay, commented Capt.

Nitin Chopra, a senior marine risk consultant associated with Allianz Commercial.

A recent report has warned that unwinding the shadow fleet tankers way faster could result in a severe economic shock worldwide.

The grey tanker fleet—as monitored by brokers BRS—has grown by 17% this year to 787 units, which equals 8.5% of total tanker capacity.

With more large vessels classified as grey, the tanker tonnage by dwt is at a “staggering” 93.7m dwt, the BRS stated in a recent tanker report, representing 13.7% of the tanker tonnage.

Even though the government and regulators are monitoring the grey fleet, its size arguably makes it more difficult to regulate.

Excluding 13.7% of worldwide tonnage would send the tanker markets into an upward spiral, resulting in a widespread economic shock, the BRS warned.

BRS further suggested that the regulation should be gradual and targeted not to inject volatility into the markets.

Reference: Splash 247, Tradewinds

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