Russia has almost doubled its shadow fleet for exporting liquefied gas in a year

Russia, despite US and EU sanctions, has almost doubled its shadow fleet for exporting liquefied gas in a year.

Bloomberg writes about this.

The sanctioned Arctic LNG 2 is now serviced by at least 20 vessels with opaque ownership structures, up from 11 at the end of December.

Sanctions have forced Moscow to postpone a plan to triple LNG production by 2030. In response, Russia is rapidly expanding a shadow fleet to continue transporting gas to Asia.

Only China is buying this sanctioned gas. Putin and Chinese leader Xi Jinping discussed gas at the Shanghai Cooperation Organization summit in Kyrgyzstan these days. The Trump administration has not yet threatened China with sanctions for buying this gas.

Arctic LNG 2 is located in Western Siberia, where ice limits shipping for most of the year. Therefore, the gas is first transported in special ice-class tankers and then reloaded onto conventional vessels.

The lack of tankers is currently holding back exports: the current fleet allows for the export of 5.2–5.4 million tons of LNG per year, while the plantʼs two operating lines have a capacity of 13.2 million tons.

Due to the fleet expansion, Rystad Energy has raised its Arctic LNG 2 production forecast for 2026 by 9% to 5 million tons. Russia may need up to 30 conventional tankers to reach full capacity. So Moscow is likely to continue expanding its shadow fleet.

What is known about the Russian shadow fleet?

In early December 2022, the G7 members, as well as Australia and the EU, imposed price caps on Russian oil, setting a maximum price of $60 per barrel. From February 5, 2023, these countries imposed price caps on Russian petroleum products: $100 for diesel and $45 for various lubricants.

To circumvent oil sanctions, Russia has begun building a shadow fleet. This is a fleet of old tankers that turn off their beacons so that they cannot be seen by surveillance systems. These tankers are mostly operated by the Russian state-owned company Suchkomflot.

According to The Guardian’s September 2023 estimates, Russia’s shadow fleet consists of approximately 600 vessels (they transport mainly crude oil, petroleum products and LNG), which provide 70% of Russia’s oil exports and approximately 10% of the world’s “wet cargo” fleet. With its help, the Russian Federation transports almost 1.7 million barrels of oil per day, which brings large profits to the Kremlin.

In May of this year, four more LNG tankers joined the Russian shadow fleet. In June , another tanker joined the LNG fleet, bringing the total to at least 21 vessels.

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