The recent video sheds light on the concept of a “shadow fleet,” a collection of approximately 100 tankers responsible for transporting Russian oil while circumventing Western sanctions. These tankers, including the C1, operate from countries such as the UAE, India, and China, following Russia’s development of its own shipping and insurance in response to a price cap on its oil by the West. The Gulf States, particularly Saudi Arabia and the UAE, have seen economic benefits from this trade, using discounted Russian oil domestically and increasing their exports, while providing financial services to facilitate Russia’s oil trade.
- The “shadow fleet” refers to around 100 tankers that carry Russian oil and products, bypassing Western sanctions.
- Gulf States like the UAE and Saudi Arabia are key destinations for these tankers, benefitting economically from discounted Russian oil.
- Russian oil is sold at a discount and used domestically in the Gulf States, allowing them to export more of their own oil to markets such as Europe.
- The shadow fleet emerged following the imposition of a price cap on Russian oil by Western countries in December 2022.
- Russia has built its own shipping and insurance to operate independently of Western companies.
- Shadow fleet ships typically changed ownership after the Ukraine war began, dealing almost exclusively with Russian oil and operating out of countries not enforcing the sanctions.
- The UAE has become a major hub for Russian oil storage and re-export, as well as a financial base for Russian crude trading.
- Trade between Russia and the UAE increased by 63% in the first nine months of 2023 compared to the same period in 2022.
- The UAE maintains a currency pegged to the dollar, which facilitates trade without the direct impact of U.S. sanctions.
- Russia’s focus is on shielding its oil trade from sanctions rather than maximizing revenue, suggesting the current situation may continue into 2024.
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Original video here.
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