EU Targets Deal-Makers Behind Russia’s Ghost Fleet, but Oil Keeps Flowing to India and China

How Russia’s Ghost Fleet Keeps Crude Exports Alive Despite EU Sanction Targets

The European Union has sharpened its aim at the shadowy network that keeps Russian oil flowing in defiance of sanctions, designating key traders Murtaza Lakhani and Etibar Eyyub as the architects of the so-called ghost fleet. These individuals, according to EU authorities, have been instrumental in constructing the labyrinth of front companies, fake flags and unorthodox insurance that allows Russian crude to reach global markets despite the G7 price cap and outright bans imposed after the 2022 invasion of Ukraine.

Yet the latest designations barely dented the flow. Analysis by market experts confirms that India and China now absorb virtually all seaborne Russian crude that would once have landed in Europe. The sheer scale of the rerouted trade — state-owned Rosneft and privately held Lukoil both depend on it — underlines a simple economic logic: the discounts required to entice Asian buyers, while eating into per-barrel revenue, are more than compensated by the surge in total export volumes. In effect, Moscow has traded price for quantity.

The shadow fleet itself exemplifies how sanctions evasion has become a sophisticated industry. Vessels managed by entities like Ro Marine routinely switch flags of convenience and rely on fraudulent insurance certificates to hide their true ownership and voyage destinations. The result is a cat-and-mouse game where the West’s legal, methodical process of listing individuals or companies moves far slower than the network’s ability to spawn new corporate shells, new payment conduits and new maritime identities.

Beyond the economic debate, European nations confront a direct security threat. Many of the shadow tankers — poorly maintained and carrying heavy crude — traverse the congested and environmentally sensitive waters of the Baltic Sea. Safety experts warn of a rising risk of catastrophic oil spills and damage to submarine cables and energy infrastructure. The ghost fleet is no longer just a sanctions problem; it is a growing hazard to Europe’s maritime domain.

Why the Oil Trade Still Thrives — and the Asymmetry That Undermines Western Pressure

The Volume-for-Discount Bargain That Sustains Russian Revenues

The economic model driving Moscow’s resilience is brutally effective. With Urals crude trading at roughly a $20-per-barrel discount to Brent at Asian ports, Russia earns less on each barrel than it did before the war. However, the total volume of exports to India and China has ballooned, in some months reaching levels that more than make up the unit revenue loss. This is not a temporary fix — the two Asian giants now have integrated Russian crude into their refining systems, and the deep discounts they receive are too attractive to abandon for political reasons alone. For Moscow, the trade provides a steady stream of petrodollars that continues to finance the war, despite the West’s hope that price caps and shipping bans would starve it of funds.

The Asymmetry Built Into the Sanctions Regime

Every new sanctions package highlights a fundamental mismatch. Western authorities must follow legal procedures, build airtight cases and then publicly announce new designations — a process that can take months. The networks they target, by contrast, operate with maximum agility. When a trader like Murtaza Lakhani is sanctioned, his role is quickly assumed by a new layer of intermediaries, often registered in jurisdictions with weak oversight. The same ship that flew the Liberian flag yesterday may appear under the Tuvalu flag today, with a freshly minted insurance policy from a non-Western underwriter. This structural asymmetry means that, even when individual sanctions hit their immediate targets, the pipeline itself is largely undisturbed.

Why India and China Will Not Walk Away

For New Delhi and Beijing, the calculus is straightforward. The preferential pricing on Russian crude shields their economies from the full force of global oil-price volatility, lowers import bills and provides a competitive advantage to their refiners. India, in particular, has become a major re-exporter of refined products made from discounted Russian crude, capturing margins that Western refining could only envy. Sanctions are not universal — they are imposed by the West, and neither India nor China has any legal obligation to enforce them. As long as the financial and reputational risks of sustaining trade with Russia remain lower than the economic gains, the tankers will keep arriving at Sikka, Jamnagar and Zhoushan.

Europe’s Security Blind Spot at Sea

The ghost fleet’s passage through European waters — especially the Baltic — has turned a sanctions-evasion story into a pressing security matter. Shadow tankers, frequently lacking proper maintenance and transparent insurance, are a floating liability. Documented near-misses and deliberate disabling of automatic identification systems raise the spectre of collisions, groundings or sabotage against subsea infrastructure, including gas pipelines and fibre-optic cables. In the Baltic, where Russia’s maritime envelope already creates tension, the presence of these unaccountable vessels amounts to a slow-burning crisis that demands a more assertive coastal-state posture.

What Europe Must Do to Counter the Ghost Fleet Threat

The EU and its coastal states cannot stop the ghost fleet through listings alone. The security and environmental dangers demand immediate, practical steps at sea:

• Exercise sovereign authority to ban dangerous vessels. International law permits a coastal state to deny passage to ships that pose a threat to safety or the marine environment. EU member states, particularly those along the Baltic and North Sea, should instruct port authorities and naval forces to intercept and turn away shadow tankers that lack valid insurance, proper classification or comply with safety standards. A small number of high-profile detentions would send an unambiguous signal.
• Harmonise inspections and enforcement. Current controls vary widely; a vessel rejected by Denmark may simply divert to a less vigilant neighbour. The European Maritime Safety Agency should coordinate a real-time information-sharing protocol that flags suspect vessels across all EU waters, ensuring that a ship’s dangerous record follows it wherever it tries to enter.
• Target the insurance and flag-of-convenience loopholes. Ro Marine and similar entities exploit a patchwork of permissive registries. The EU should pressure flag states to revoke registrations for vessels found to be part of the ghost fleet, and work with the International Maritime Organization to create a blacklist of insurers that provide fraudulent cover. Without insurance, no port will allow a ship to call.
• Increase diplomatic pressure on India and China — with a different framing. Rather than demanding alignment with sanctions, which neither country will accept, Western diplomacy should emphasise the environmental and security risks that the ghost fleet creates for all nations that depend on free and safe sea lanes. That message may resonate more strongly with importers who, at some point, will be exposed to the consequences of a major spill or infrastructure attack.
• Invest in subsea infrastructure resilience. Given that many shadow tankers criss-cross the same areas as critical cables and pipelines, the EU should expedite the deployment of sensor networks, patrols and rapid-repair capabilities to protect these assets, rather than wait for a proven act of sabotage.