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Planet Money

How Russia's shadow fleet is sailing around oil sanctions

with Bjarne Cesar Skinnerup, Michelle V.C. Bachman

Published October 17, 2025
View Show Notes

About This Episode

The episode investigates Russia's "shadow fleet" of aging oil tankers that has emerged to evade Western sanctions and the G7 oil price cap imposed after Russia's 2022 invasion of Ukraine. A Danish maritime pilot, Bjarne Cesar Skinnerup, describes guiding increasingly numerous, poorly maintained tankers carrying Russian oil through the Danish Straits, while maritime intelligence specialist Michelle V.C. Bachman explains how the fleet is structured using opaque ownership, fake insurance, and permissive or fraudulent flags. The hosts explore how this underground shipping network reshapes global oil flows, sustains Russian revenues, raises geopolitical tensions, and creates severe environmental and financial risks for coastal nations, while leaving individuals like Bjarne in a moral bind.

Topics Covered

International trade Environmental crime Ukraine War and empire Insurance Tariffs Pollution Economic sanctions Global oil trade Maritime safety

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Quick Takeaways

  • Russia has assembled a "shadow fleet" of more than 600 old tankers, roughly one in six oil tankers worldwide, to move oil outside Western sanctions and the G7 price cap.
  • These vessels often use opaque ownership structures, fake or dubious insurance, and permissive or fraudulent flags, making it hard to hold anyone accountable for accidents or rule-breaking.
  • The shadow fleet shifts global oil flows, giving major buyers like China, India, and Saudi Arabia access to discounted Russian oil while allowing Russia to keep exporting above the price cap.
  • Enforcement of maritime rules is weak due to principles like the right of innocent passage and the lack of a global "highway patrol," leaving coastal nations reluctant to detain suspicious ships.
  • Experts warn the largely uninsured, poorly maintained fleet is an environmental disaster waiting to happen, with the costs of any major spill likely to fall on nearby coastal taxpayers.
  • Danish pilot Bjarne Cesar Skinnerup continues to guide shadow ships safely to avoid catastrophic spills, even as he feels complicit in funding Russia's war effort in Ukraine.
  • The sanctions and price cap have reduced Russia's earnings and forced costly workarounds, but they have also driven a large part of the oil trade underground.
  • Middlemen, certain shipowners, and hubs like Dubai have profited from facilitating the shadow oil economy that grew out of the sanctions regime.

Podcast Notes

Introduction and Bjarne's work as a maritime pilot in the Danish Straits

Bjarne's view of his job before the shadow fleet

He saw his work as straightforwardly good for the world[0:27]
• He believed he was protecting his stretch of Danish coastline from environmental and financial catastrophe in his small way

Description of a ship pilot's duties in the Danish Straits

Bjarne operates in the highly trafficked waters connecting the Baltic Sea to the rest of the world[0:46]
• He suits up in all weather, gets into a small boat, and rides out to meet large vessels in the straits
He boards big ships and temporarily takes command[0:50]
• For a few hours, he controls the ship and guides it safely through busy and dangerous waters
Primary goal is collision and grounding avoidance[1:11]
• He must prevent the vessel from hitting other ships or running aground among sandbars, currents, islands, and bridges

Light-hearted comparison to nautical pop culture characters

Host asks whether Bjarne identifies more with Popeye or Captain Haddock[1:21]
• Bjarne says if he is bad-tempered, he is probably like Captain Haddock but without Haddock's drinking problem

Complexity of navigation in the Danish Straits

The Straits have treacherous conditions requiring local knowledge[1:43]
• He must know every sandbar, overflow current, hundreds of islands, dozens of bridges, multiple ports, and many ferries
Reason big ships hire pilots like him[1:59]
• Large ships routinely employ maritime pilots to navigate these congested and risky waters
Analogy to a fighter pilot[2:13]
• Host compares his precise maneuvering of giant tankers to Tom Cruise in Top Gun, though Bjarne notes they move in slow motion

Economic importance of the Danish Straits and dominance of oil shipping

Massive value of commerce passing through the straits[2:42]
• Billions of dollars of commerce flow through the Straits of Denmark every month
Bjarne's modest view of his role[1:40]
• He describes pilots as a little cog in the big machine of the global economy
Oil as the dominant cargo, especially Russian oil[2:44]
• Oil makes up a huge percentage of the cargo through the Danish Straits, and most of that oil is Russian
Scale of individual oil tankers[2:55]
• Some tankers carry as much as 37 million gallons of oil, representing hundreds of millions of dollars in value

Normal life cycle of oil tankers and first signs of something strange

Typical aging and disposal pattern of European oil tankers[2:55]
• After roughly 15 years in service, most go to poorer parts of the world and then to scrap yards
Older ships start reappearing in the straits[3:09]
• A few years ago, Bjarne noticed old tankers he expected to be scrapped were coming back through his waters
Conditions on board show cost-cutting[3:33]
• He observes unclean, smelly toilets as signs that ship operators are running the vessel as cheaply as possible

Signs that ships are being disguised or operated unusually

Familiar ships appear with new names[3:09]
• Bjarne is sure he has piloted some of the ships before, but they are now renamed
Unknown insurers and unfamiliar flags[3:45]
• Their paperwork lists insurance companies he has never heard of and flags from countries he has not previously seen in those waters
Overall impression that something is off[3:50]
• Bjarne concludes these ships are trying to avoid scrutiny of who owns the ship and cargo and where the oil comes from or is headed

Emergence and naming of the "shadow fleet"

He describes the ships as working outside the spotlight[4:02]
• They appear intent on flying under the radar, hiding ownership and cargo details
The term "Shadow Fleet"[4:33]
• Bjarne says these ships are called "Shadow Fleet ships," collectively referred to as the "Shadow Fleet"
Link to Russian oil and sanctions[4:29]
• They carry full loads of Russian oil from ports near St. Petersburg through the Baltic to the rest of the world, which became problematic after the invasion and sanctions
Bjarne's feeling of complicity in Russia's war machine[4:48]
• He feels he has shifted from being a cog in the global economy to a cog in the Russian war machine due to these ships flouting sanctions

Shadow Fleet volume increases rapidly

Growth from a trickle to a constant flow[4:55]
• What started as a few ships in 2022 has become continuous traffic; on the day of the interview, Bjarne is piloting two shadow ships
He characterizes the current situation as "wild west"[5:09]
• He says it's completely wild west in terms of what's happening with these ships in his waters

Investigating the shadow fleet and introducing maritime intelligence specialist Michelle V.C. Bachman

Need to understand why shadow ships are appearing and who is behind them

Shadow Fleet is intentionally obscure[7:27]
• The fleet is "purposefully shrouded in mystery," making it hard to determine their operators and purposes

Role and personality of Michelle V.C. Bachman

Michelle's job tracking suspicious ships[7:36]
• She is a London-based maritime intelligence specialist who helps navies and coast guards assess whether nearby ships may be carrying illicit cargo
Her familiarity with certain ships[7:36]
• She jokes that she knows some ships like recalcitrant children because they are always doing something naughty she monitors
Secrecy around her methods[8:14]
• Michelle declines to share her exact research methods, joking that she would have to shoot the hosts if she told them
Comparison to James Bond archetype[8:18]
• She rejects the James Bond label but allows being called "M" as a playful analogy

Case study: the shadow vessel Boracay

Using tracking software to follow the Boracay[8:04]
• Michelle pulls up a world map with ship tracks and locates the Boracay by name (B-O-R-A-C-A-Y)
Boracay's recent passage through European waters[8:47]
• The Boracay sailed through the English Channel that day and could have been seen from Dover early in the morning
Concept of "tanker spotting"[9:39]
• Host likens it to birding, joking about "tanker spotting" as Michelle tracks the ship nearing her coastline

How Michelle identifies a shadow vessel

Age and condition as red flags[9:43]
• The Boracay is 18 years old, which is considered very old (geriatric) for European oil tankers; the Estonian Navy documented numerous deficiencies on board
Route linking it to Russian oil exports[10:30]
• The ship had come from Primorsk, Russia's biggest Baltic oil-exporting port

Expansion of sanctions-evading shipping beyond traditional players

Earlier users of shady shipping tactics[10:26]
• Before Russia's current actions, North Korea, Iran, and Venezuela were the main states using such tactics to avoid sanctions
Russia joins and expands the shadow shipping game[10:34]
• A "shadowy Russian oil cabal" entered this space after Russia's invasion of Ukraine when sanctions were anticipated

Sanctions on Russian oil and the creation of the G7 oil price cap

Political context after Russia's 2022 invasion of Ukraine

Western aims to punish Russia and limit its war funding[10:58]
• Western countries sought to reduce Russia's income to limit spending on rockets, tanks, and soldiers attacking Ukraine
Centrality of oil and gas to Russia's budget[11:08]
• Oil and natural gas revenues provided about half of Russia's federal budget just before the war

Balancing punishment with global oil price stability

Why a total ban on Russian oil was avoided[11:20]
• Russia supplied around 15% of world oil; entirely removing it risked spiking global oil prices and worsening inflation
Design logic of the oil price cap[11:48]
• The cap allows Russia to sell oil internationally but only at or below $60 per barrel
• This capped price was significantly below then-current global oil prices, in theory cutting Russian earnings while keeping supply flowing

Enforcement of the price cap via insurance companies

Role of dominant marine insurers[12:44]
• Global shipping insurance is dominated by a few large firms, mostly in the West, which became key enforcers
Mechanism tying insurance to compliance[12:23]
• If an exporter could not prove they sold below $60 per barrel, these insurers could not provide marine insurance coverage
Insurers "technically made" the enforcers[12:36]
• Michelle notes they were not allowed to provide insurance unless the oil complied with the cap

Building and disguising the Russian shadow fleet

Russia's need for alternative shipping when mainstream owners complied with sanctions

Prior reliance on relatively new, well-run tankers[13:09]
• Before sanctions, Russian oil was carried mostly on newer ships with clean facilities and standard insurance
Mainstream shipowners' conditional willingness to work with Russia[13:07]
• Owners would lease ships to Russian exporters only if they could demonstrate sales at or below $60 with proper insurance

Strategy to assemble a separate fleet

Scope of investment in the shadow fleet[13:37]
• Michelle says building the Russian shadow fleet required about $15 billion
Use of middlemen to acquire aging ships[13:37]
• Russian oil companies had middlemen buy old, often nearly scrap-ready tankers from Western owners, then leased the ships back
Deliberately opaque ownership structures[14:07]
• Ownership is hidden behind multiple layers of special purpose vehicles in Mauritius, Seychelles, Marshall Islands, UAE, India and others
• This multilayering makes finding a true owner extremely difficult, likened to a Russian nesting doll of shell companies

Frequent renaming and reflagging of the Boracay

Rapid turnover of managers and owners[14:45]
• Since mid-2022, the ship now called Boracay has had nine ship managers, four registered owners, and three commercial controllers across multiple jurisdictions
Multiple name changes[15:01]
• It has had at least five names in its shadow-fleet life: Boracay, Odysseus, Varuna, Koala, and Pushpa

Analogy to highway requirements: insurance and registration (flags)

Importance of insurance to operate on the maritime "highway"[15:43]
• Like cars on highways, ships need liability coverage to deal with accidents; a few major firms dominate this market
Emergence of fake insurance providers[16:19]
• Michelle found newly named insurers post-sanctions that, upon investigation, did not truly exist, including one purportedly in Norway but actually in St. Petersburg
Boracay appears to lack real insurance[16:11]
• Michelle says the Boracay seems to have no genuine insurance coverage at all

Flags as maritime "license plates" and loopholes

How flags function in shipping[16:33]
• Ships must be registered in a flag state, and that country's laws and oversight apply to the vessel at sea
Shipowners can shop for favorable flags[16:57]
• Unlike vehicle owners tied to their state, shipowners can choose flags from countries like Zambia or Panama based on cost and regulatory leniency
Flag registries as revenue sources for some states[17:31]
• Some countries turn flagging into a cottage industry, collecting registration fees without close oversight
Variation in flag quality and oversight[16:57]
• Liberia and the Marshall Islands are cited as large, well-run registries with strong technical oversight
• Other registries like Gabon, Cook Islands, Gambia, Sierra Leone, Comoros, and Cameroon are described as permissive open registries
Lack of response from permissive registries[18:11]
• The show reached out to these registries but got no responses; two listed emails bounced
Some flags essentially "handed out like candy"[18:30]
• Michelle says some registries collect money but neglect to ensure compliance with safety and navigation rules
Completely fake flags used by shadow ships[17:47]
• Recent examples include ships flying a supposed "Aruba" flag, even though real Aruba does not offer ship registration
Boracay's history of dubious flags[17:57]
• In three years, Boracay has used seven different national flags, including flags of countries that do not actually have registries
• It is currently flagged to Benin and was previously flagged to Malawi; both are described as fraudulent registries in this context

Weak enforcement: right of innocent passage and geopolitical risks

Lack of a global maritime "highway patrol"

IMO sets rules but leaves enforcement to states[18:41]
• The UN's International Maritime Organization writes regulations, but individual coastal countries are responsible for enforcement

Right of innocent passage constrains coastal states

Content of the principle[19:19]
• Ships traveling from point A to B through territorial waters have a "right of innocent passage" and generally cannot be stopped
Potential abuse if widely challenged[19:32]
• Michelle notes chaos would ensue if countries arbitrarily stopped each other's ships, e.g., Britain stopping German vessels simply for disliking their looks

Examples of enforcement attempts provoking military reaction

Estonian Navy's attempt to stop a flagless shadow ship[20:01]
• When Estonia tried to detain such a vessel, a Russian fighter jet appeared, defended the vessel, and briefly entered NATO airspace
Signal sent by Russian military reaction[19:41]
• Michelle interprets the incident as a strong message: "don't mess with our ships"
Cost-benefit imbalance for coastal enforcers[20:21]
• She argues the political and security costs of enforcement attempts may outweigh benefits, discouraging proactive action

Shadow ships' additional tactics to avoid scrutiny

Turning off transponders to go "dark"[19:36]
• Vessels often switch off GPS-style transponders during sensitive activities like ship-to-ship transfers, making tracking difficult
Ship-to-ship transfers as oil laundering[20:29]
• A shadow vessel can transfer oil via hoses to another tanker; oil may change hands three or four times in one voyage
• This process is compared to money laundering: by the time oil reaches a refinery, its Russian origin is harder to trace
Boracay's record of "dark activity"[23:03]
• Michelle says Boracay has had 25 instances of dark activity, labeling it a "very, very naughty ship"

Limited impact of occasional interdictions

French Navy's temporary detention of the Boracay[23:18]
• After the interview, France boarded the ship, made minor charges against the captain, but released the ship within days
Putin's response to French actions[23:30]
• Vladimir Putin publicly called the French move piracy and objected to the boarding

Scale of the Russian shadow fleet

Fleet size and characteristics[23:46]
• Michelle estimates more than 600 ships now form the Russian shadow fleet, many with little or no insurance and carrying sanctioned Russian oil around the world

Global economic impacts and rerouting of oil flows

Growth of the shadow fleet and its share of global tanker capacity

Shadow ships now represent a significant fraction of oil tankers[25:56]
• The shadow fleet accounts for about one in six oil tankers worldwide

Winners from discounted Russian oil

Main buyers outside the sanctions coalition[27:02]
• Countries that did not join sanctions, notably China and India, became primary buyers of capped or discounted Russian oil
Price dynamics for these buyers[26:13]
• Russia sells oil above the $60 cap to these countries but still at discounts relative to broader market prices, making it attractive
Scale of India's import increase[27:08]
• India's Russian crude imports rose from about 100,000 barrels per day to 1.5 million barrels per day
China as a key beneficiary[27:08]
• China is described as the key beneficiary of deeply discounted Russian oil

Saudi Arabia's role as an indirect beneficiary

Saudi imports of Russian fuel oil[28:02]
• Saudi Arabia has become one of the largest consumers of Russian fuel oil, especially diesel, for domestic power needs
Arbitrage opportunity for Saudi exports[28:02]
• By burning cheap Russian fuel at home, Saudis free up more of their own oil to sell at higher prices abroad, capturing the price difference

Other beneficiaries: ship sellers, middlemen, and Dubai

Profits for owners of aging tankers[28:28]
• Western shipowners who offloaded rusty, near-scrap tankers into the shadow fleet profited from sales that would otherwise yield scrap value
Middlemen facilitating the underground trade[28:22]
• Intermediaries who structure deals, manage shell companies, and arrange logistics have made money in the shadow oil economy
Dubai as a new hub for shadow oil business[28:30]
• Dubai has replaced traditional hubs like Geneva as a business and financial center for negotiations and deals involving Russian oil

Additional Western attempts to tighten sanctions

Targeting individual shadow ships[28:54]
• Western countries identify specific shadow vessels and deny them ancillary services like fuel and maintenance
Proposals to lower the oil price cap[29:02]
• As global oil prices have declined, there have been suggestions to lower the cap on Russian oil further
U.S. pressure on India via tariffs and diplomacy[29:10]
• The Trump administration imposed large tariffs on India as part of its own approach to punishing big buyers of Russian oil
• The U.S. again pressed India to cut Russian imports, and Reuters reported some refineries planned to reduce purchases

Effectiveness of sanctions and looming environmental risks

Economic impact on Russia's revenues and costs

Increased shipping costs due to the shadow fleet[28:30]
• Russia had to spend around $15 billion on the fleet itself, adding to the cost of exporting oil under sanctions
Reduced earnings despite continued exports[30:02]
• Michelle says Russia has earned less than it would have without sanctions, even though it continues to sell oil

Unintended consequence: pushing oil trade underground

Parallel to other prohibition-era black markets[30:06]
• Hosts liken this to prohibition: attempts to regulate push activity into hidden networks, benefitting opportunists

Environmental and safety dangers from uninsured, aging tankers

Dark Fleet described as an accident waiting to happen[30:33]
• Michelle expresses surprise there hasn't yet been a major accident, predicting an eventual billion-dollar spill
Example of a deadly explosion off Malaysia[30:44]
• A 27-year-old shadow ship exploded off Malaysia, killing three crew; little oil was onboard, but a full load could have caused a huge spill
Warnings from marine insurers and experts[31:08]
• Michelle recounts that she and marine insurers have warned for years that a major accident would cause a billion-dollar oil spill

Bjarne's dilemma: safety versus complicity in war funding

Risk to Denmark from a potential spill

Comparison to the Exxon Valdez disaster[31:36]
• Bjarne references the Exxon Valdez spill on the U.S. west coast as an example of how devastating a major tanker accident could be
Lack of insurance means local taxpayers pay[31:44]
• He notes that if a shadow ship without insurance spills oil, Danish taxpayers would bear cleanup costs

Dual obligations: navigational duty and moral unease

Legal and professional duty to guide all ships[32:00]
• The Danish government committed in 1857 to provide pilotage through the straits, and Bjarne sees it as his professional duty to bring every vessel through safely
Sense of enabling Russian military capacity[32:14]
• He observes that by doing his job well, he ensures Russian oil gets out, which he connects to more artillery shells, drones, and killing in Ukraine
Emotional conflict and helplessness[32:43]
• He admits feeling emotional and conflicted, saying he cannot see what an ordinary Danish pilot can do to resolve this contradiction

Bjarne's current approach to the situation

Continuing to pilot ships safely[32:02]
• For now, he continues to pilot every ship carefully, including shadow vessels, to protect the coastline and economic waterway
Reporting suspicious activity[33:01]
• He reports anything suspicious he observes on these ships to the authorities
Catch-22 between environmental protection and conscience[33:05]
• He recognizes a choice between keeping the Danish coastline clean or his conscience, concluding he cannot fully achieve both simultaneously

Closing credits (non-promotional content)

Production and editorial team acknowledgments

Producer, editor, fact-checker, engineers, and executive producer named[33:44]
• The episode was produced by Willa Rubin, edited by Marianne McCune, fact-checked by Sierra Juarez, engineered by Kwesi Lee and Sina Lafredo, with Alex Goldmark as executive producer

Hosts sign off

Alexei Horowitz-Ghazi and Daniel Ackerman close the episode and thank listeners[33:48]

Lessons Learned

Actionable insights and wisdom you can apply to your business, career, and personal life.

1

Policies designed to constrain bad actors can create large underground systems when enforcement relies on intermediaries who can be bypassed or replaced.

Reflection Questions:

  • • Where in your industry or community do rules unintentionally push activity into gray or black markets instead of eliminating it?
  • • How might you redesign a policy or process you influence so that enforcement is more direct and harder to circumvent?
  • • What is one current rule or constraint you rely on that may be less effective than it appears because people can route around it?
2

Opaque ownership structures and complex intermediaries make accountability difficult, so tracing responsibility requires proactively mapping who actually controls critical assets.

Reflection Questions:

  • • Which suppliers, partners, or platforms in your work have ownership or control structures you do not fully understand?
  • • How could you improve your due diligence so you can see beyond the first layer of counterparties to who really makes decisions?
  • • What is one relationship or contract you depend on where clarifying true responsibility would significantly reduce your risk?
3

Global systems often assume a "right of innocent passage," and challenging that assumption can have high political or relational costs, so you must be strategic about when and how you enforce boundaries.

Reflection Questions:

  • • In what situations do you currently allow "innocent passage" in your life or business-letting things slide to avoid conflict?
  • • How could you distinguish between benign behavior that should be tolerated and patterns that warrant you taking a stand despite potential pushback?
  • • What is one boundary you could enforce more clearly this month, even if it risks short-term friction, because the long-term risk of inaction is greater?
4

Short-term economic gains from using cheaper, lower-quality infrastructure can mask large, long-term risks that will eventually fall on whoever is least able to avoid the damage.

Reflection Questions:

  • • Where are you or your organization currently choosing lower-cost options that might carry hidden safety, reputational, or environmental risks?
  • • How might you better account for worst-case scenarios and tail risks when evaluating seemingly attractive cost savings?
  • • What is one investment in quality, safety, or resilience you could prioritize now to avoid a potentially catastrophic downside later?
5

Individuals embedded in larger systems can face deep moral dilemmas when doing their job well contributes to outcomes they oppose, highlighting the importance of both personal ethics and systemic change.

Reflection Questions:

  • • Are there parts of your role where high performance might indirectly support goals or behaviors you are uncomfortable with?
  • • How could you align your day-to-day actions more closely with your values while still honoring your responsibilities and constraints?
  • • What is one concrete step-such as speaking up, documenting issues, or proposing alternatives-you could take to reduce the gap between your professional duties and your conscience?

Episode Summary - Notes by Taylor

How Russia's shadow fleet is sailing around oil sanctions
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