• Russia

September 24, 2025, 1:14 AM View Comments ()

U.S. President Donald Trump recently declared that he was ready to impose sweeping sanctions on Russia—if NATO countries stopped buying Russian oil. Bold as it sounds, the reality is more complicated. Only three of NATO’s 32 members—Hungary, Slovakia, and Turkey—still import Russian oil, while the European Union has committed to phasing out Russian fossil fuels by the end of  2027. Turkey, one of Russia’s largest customers, shows no inclination to align with the West, making a full NATO embargo unrealistic. So if buyers cannot be persuaded to walk away from Moscow, where can Washington, Brussels, and the G-7 still act to choke Russia’s war economy in ways that are both practical and effective? The answer lies not in waiting for 2027 or hoping Ankara changes course but in a more immediate target: the shadow fleet, whose operations reveal how Russia continues to fund its war while evading the West’s most powerful economic tools.

Before sanctions were imposed in 2022, nearly 90 percent of Russia’s fossil fuel exports were transported through the regular Western market. The Russian shadow fleet, which Moscow began assembling before the EU embargo, is not simply redirecting Russian oil to new Asian markets, however. It was deliberately assembled to circumvent the G-7+ oil price cap, which permits trade in Russian crude only if sold at a price below $60 a barrel. The cap relies on Western insurers to verify compliance, but Moscow built a closed system where every link—shipowner, manager, insurer, and flag registry—operates outside G-7 jurisdiction. Since 2021, shadow tankers’ share of Russian oil shipments has risen from 13 to 47 percent, as of this August. By the third year of the war, the fleet accounted for roughly a third of Russia’s fossil fuel export revenues, while fossil fuels overall continue to sustain 30-50 percent of the federal budget—and fund Moscow’s war in Ukraine.

Beyond the financial toll, the shadow fleet undermines the credibility of sanctions as a foreign-policy instrument. The reason Russia’s economy remains resilient is because sanctions are weakly enforced and export controls are leaky, particularly as U.S. goods flow through nonsanctioning countries. Washington relies on them more heavily than any other tool, and their deterrent value erodes if they can be easily circumvented.

Western governments quickly recognized the danger. At first, sanctions targeted the companies managing shadow fleet ships, but that approach failed: Each time a firm was blacklisted, a new entity appeared in an offshore haven, creating a whack-a-mole dynamic while the flows of “black gold” continued unabated. This experience led policymakers to pivot toward vessel designations—and here, the results have been far more striking. The U.S. Treasury Department sanctioned 211      tankers, and the impact was immediate: from January to July, even without any new U.S. designations this year, only 11 percent of the already designated vessels continued to load in Russia. The EU went even further, blacklisting 415 ships through July, although 17 percent of them still operated, while the U.K.-designated vessels saw 24 percent continue to load. Despite these leakages, the broader effect was clear. Data from the Centre for Research on Energy and Clean Air, where I work, shows that the shadow fleet’s share of Russian crude exports fell from 84 percent in January to 58 percent in July, before climbing back to 64 percent in August. Designations not only disrupted flows but also restored leverage: Russia depends on tankers to move its oil, and Western-controlled vessels must comply with the price cap.

But here lies the glaring weakness: Only a small number of ships appear on multiple sanctions lists. This fragmented approach creates loopholes that Russia exploits. A tanker barred from European waters may still find buyers in Asia, while one targeted by Washington may continue operating in the Mediterranean. The lack of harmonization signals disunity, suggesting to Russia and global markets that Western resolve is negotiable.

The EU and other sanctioning countries have begun closing loopholes, gradually aligning their vessel lists with those of the United Kingdom, Australia, Canada, and New Zealand. The United States, once the driving force behind sanctions, is conspicuously absent. After President Joe Biden left office in January—having rolled out large-scale shadow fleet sanctions in his final months—Washington largely paused sanctions. Under Trump, many sanctions remain in place, but some enforcement tools have been dismantled. Task Force KleptoCapture, which pursued Russian oligarchs, was disbanded. More strikingly, the Treasury Department’s Office of Foreign Assets Control  major Russian banks to conduct transactions for Hungary’s Paks Nuclear Power Plant until December. Washington also refused to lower the oil price cap, despite most of its allies doing so. Together, these steps have slowed enforcement and cast doubt on the U.S. commitment to sanctions as a central tool of pressure on Moscow.

As former U.S. Secretary of State Henry Kissinger observed, negotiations succeed when parties agree on what they realistically can. Coordinating vessel designations among the United States, the EU, and other partners aligns with this principle: It is low-cost and high-impact. In practice, tankers blacklisted in Brussels must be instantly mirrored in Washington—and vice versa, if Washington resumes designating vessels. Given the strategic importance of the shadow fleet to Russia, a joint task force should be formed to share real-time intelligence on vessel movements, ownership, flagging, and insurance. Unlike persuading Turkey to cut purchases, pressuring India with tariffs, or waiting for the EU’s 2027 phase-out, harmonized sanctions require little political capital but would deliver immediate results. A united front would shrink Russia’s export capacity, deprive the Kremlin of billions of dollars in revenue, and restore sanctions as a credible instrument of statecraft—while sending a clear signal of trans-Atlantic unity at a moment when Moscow is betting on Western division.

Shadow fleet sanctions are no silver bullet, but they are a practical, realistic step. To make sanctions credible, the price cap—the cornerstone of Western measures against Russia—must be enforced more rigorously, with maritime insurers required to verify bank invoices rather than rely on ship operators’ statements. The United States and EU have multiple ways to align their efforts; closing the refining loophole—where both import products from refineries running on Russian crude—is another example of how this can be done.

In the EU’s 19th sanctions package against Russia, announced last week, 118 new vessels were designated, but this is not enough. The United States and Europe must act together on the shadow fleet, before it sails further beyond reach.