Russia’s shadow fleet will be hit with the largest ever sanctions package from the UK government today.
It will sanction up to 100 vessels that form a core part of Putin’s shadow fleet operation and are responsible for carrying more than $24bn-worth of cargo since the start of 2024.
The shadow fleet – a network of ships often characterised by weak ownership and multiples flags of convenience, for transporting sanctioned goods – is bankrolling the Kremlin’s war in Ukraine and damaging critical infrastructure through “reckless seafaring”.
Protecting subsea infrastructure from malicious and careless incidents is expected to be a key part of leaders’ discussions at a Joint Expeditionary Force (JEF) summit to be held in Oslo today.
The JEF is a UK-led defence and security partnership involving ten northern European countries.
The move comes after the JEF activated an advanced UK-led reaction system, known as Nordic Warden, in January, to track potential threats to undersea infrastructure and monitor the Russian shadow fleet, following reported damage to a major undersea cable in the Baltic Sea.
The UK has identified 22 areas of interest – including parts of the English Channel, North Sea, Kattegat, and Baltic, which are currently being monitored from the JEF’s operational headquarters in Northwood near London.
Subsea infrastructure carries 99% of international telecommunications data, and vital energy supplies such as electricity, oil and gas.
UK Prime Minister Keir Starmer said, “The threat from Russia to our national security cannot be underestimated. That is why we will do everything in our power to destroy his shadow fleet operation, starve his war machine of oil revenues and protect the subsea infrastructure that we rely on for our everyday lives.”
Russia’s oil and gas revenues have fallen every year since 2022 – losing over a third of its value in three years – but liquefied natural gas has increased. The European Commission recently announced new restrictions to try and stem the flow.
The US Department of the Treasury introduced sanctions to reduce Russian energy revenues by blocking Gazprom Neft and Surgutneftegas, and imposing new measures to tackle the ‘shadow fleet’ of opaque operations and traders, in January.
Report considers two key LNG scenarios
The US, which currently supplies half of Europe’s LNG imports and roughly 15% of the continent’s total gas supply, would be disproportionately impacted if current restrictions on Russian gas and LNG were to change, a new S&P Global Commodity Insights study finds.
U.S. LNG Exports at Risk: Potential Unwinding of Sanctions on Russian Natural Gas found that, under an “opening the taps” scenario where US sanctions on Russian natural gas pipeline and LNG exports are withdrawn and new volumes of Russian gas flow to Europe, more than 17 million metric tons per annum (mmtpa) in new US LNG projects, representing $70bn in related investment, would be curtailed compared to a “current trend” scenario.
Conversely, a scenario with Europe increasingly phasing down Russian LNG and most piped gas, largely consistent with the EU Commission’s REPowerEU Roadmap published on 6 May, would result in an additional 12 mmtpa in US LNG projects reaching FID, representing an additional $48bn in related investment.
