The Delegates Lounge

Shadow Fleet is Russia's Dark Gambit: Undercurrents Part 2

• The Delegates Lounge LLC • Season 3 • Episode 4

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Welcome to the second edition of "Undercurrents," an ongoing series in The Delegates Lounge podcast about the oceans and seas that unite us, and sometimes, divide us. 

In this episode, we're joined by Michelle Wiese Bockmann, a former longtime analyst with Lloyd's List, one of the world’s oldest continuously running journals that has provided shipping news from London for centuries. 

Michelle expounds on the explosive growth of what she calls "the Dark Fleet," also commonly called "the Shadow Fleet," a parallel shipping network that transports sanctioned oil from Russia, Iran, and Venezuela while shippers and receivers thumb their noses at the United Nations Convention on the Law of the Sea (UNCLOS).

What began as just a small number of vessels in 2018 has mushroomed into more than 700 tankers, by her estimation, roughly 18% of the globally trading tanker fleet. Michelle reveals the elaborate deceptions employed by these vessels: so-called "flag hopping" between opportunistic registries, using Byzantine ownership structures to hide beneficial owners, spoofing location data, conducting ship-to-ship transfers at sea, and operating with questionable or fraudulent insurance that couldn't possibly cover a catastrophic spill.

The environmental and safety risks are staggering. These elderly, poorly maintained vessels, averaging 22 years old, sail through environmentally sensitive areas like the Baltic Sea carrying millions of barrels of oil. "The Dark Fleet is a very serious accident waiting to happen and I'm literally surprised there hasn't been one by now, simply because the condition of these ships is so terrible," Michelle warns, describing a potential billion-dollar environmental disaster waiting to happen. Meanwhile, approximately 25 seafarers per vessel often find themselves unwitting participants in sanctions evasion, with vessel abandonment rates reaching record highs.

A recent Baltic Sea confrontation between Estonian authorities and an unflagged tanker, which we spoke with the Estonian defense minister about in our latest episode, reveals the escalation of geopolitical tensions and limited options available to coastal governments. As sanctions and price caps on Russian oil show mixed results, Michelle says that some privately-owned shipping companies have begun returning to the Russian trade as prices fall below sanction thresholds – potentially improving safety but complicating policy objectives.

Subscribe to The Delegates Lounge for more critical insights into the maritime undercurrents shaping global politics, economics, and environmental security.

Speakers:

J. Alex Tarquinio (host) is a resident correspondent at the United Nations in New York and co-founder of The Delegates Lounge podcast. @alextarquinio of @delegateslounge on X  and @thedelegateslounge on Instagram. ‪

 Michelle Wiese Bockmann (guest) is a maritime intelligence analyst and former longtime writer with Lloyd’s List, one of the world’s oldest continuously running journals. @Michellewb_ on X.

References:

Recent articles by our guest include this opinion piece in the Financial Times.

https://www.ft.com/content/7a89f7ae-cf3b-4e53-88bb-b87916f3eeef

Our host mentions in this episode that she interviewed Michelle for an article in The New York Times when the sanctions were relatively new.

https://www.nytimes.com/2

Credits:

Music: Adobe Stock

Photos: Adobe Stock/momentscatcher. Watchman on the navigation bridge

J. Alex Tarquinio:

Welcome to the Delegates Lounge. Pull up a chair. I'm Alex Tarquinio, a journalist based at the United Nations here in New York City, and your emcee for this podcast featuring some of the most influential minds in the world today. Settle in for some riveting tete-a-tete, available wherever you listen to podcasts. Welcome back to the second episode in our new series, called Undercurrents, about the oceans and seas that unite us and sometimes divide us. We're launching this ongoing series for the United Nations World Oceans Day on June 8th. In our first episode in the series, an exclusive interview with Estonia's Defense Minister Hanno Pevker, we delved into the threats posed by Russia's so-called Shadow Fleet. Here's a description of the Shadow Fleet by the Special Envoy for Maritime Security of the Danish Ministry for Foreign Affairs at a Greek-led UN Security Council debate in May.

Special Envoy for Maritime Security of the Danish Ministry for Foreign Affairs:

Coastal states' capacities to monitor and respond to maritime threats above and below the surface need to be enhanced. The increasing reliance on substandard vessels to evade sanctions, including UN sanctions, poses a great risk to the environment, seafarers, maritime safety and security. These vessels are often old, poorly maintained, insufficiently insured and sail with their transponders off. This is a challenge not only in the North Sea and Baltic Sea, but also the Straits of Malacca and Singapore in the Sea and elsewhere. If we do not act and ensure effective enforcement, it will only be a matter of time before an oil spill destroys a coastline somewhere.

J. Alex Tarquinio:

Drawing upon her encyclopedic knowledge of seafaring, our guest in this episode, Michelle Wiese Bockmann , pulls back the veil on the many subterfuges involved in maintaining this parallel fleet of old, unregistered or sanctioned tankers that transport not only Russia's oil and petroleum products, which have been under price caps since Russia's full-scale invasion of Ukraine more than three years ago, but also facilitates sanctioned oil shipments from Iran and Venezuela.

J. Alex Tarquinio:

Michelle details the ruses involved in maintaining the Shadow Fleet, which she refers to as the Dark Fleet. Michelle is a veteran maritime intelligence analyst and former longtime writer with Lloyd's List, one of the world's oldest continuously running journals that has provided shipping news from London for centuries. I first spoke with her about the Shadow Fleet for an article in the New York Times when the price cap on Russia's oil exports was relatively new. As always when I refer to an article, we'll include the link in the show notes, along with some articles by our guest. Our discussion with Michelle was so informative that we're bringing it to you in two parts, with the next episode covering a wide range of maritime topics. Here's our conversation, michelle. Thank you so much for joining us in the Delegates Lounge.

Michelle Wiese Bockmann :

Thank you very much for having me.

J. Alex Tarquinio:

Well, we're glad that you could make time for us, especially as you've just gotten back from Malta, where you were a Distinguished Visiting Fellow in the International Maritime Law Institute run by the IMO. Perhaps you could start by telling us about some of the topics that were weighing most heavily on everyone's minds there.

Michelle Wiese Bockmann :

Well, I was there to lecture on maritime security and the legal and security implications of the so-called dark fleet of ships which are shipping sanctioned primarily Russian, venezuelan and Iranian oil, and it was. You know, there's an enormous interest in this topic and I was speaking to really the next generation of maritime leaders and they're the people that are going to be at the International Maritime Organization in the future and weighing really important policy decisions on how to deal with these emerging threats. And I have to say the IMO from what I saw at the legal committee when I sat through it in March say the IMO, from what I saw at the legal committee when I sat through it in March, is really struggling to deal with this as a government and as all marine stakeholders at the moment, because it is a very real threat to the environment, to safety and also crew welfare.

J. Alex Tarquinio:

That's very interesting about the dark fleet. It's called many things. Sometimes it's called the shadow fleet or the gray fleet. I don't know if there's a preferred term shadow fleet, dark fleet.

Michelle Wiese Bockmann :

Well, there's not really. I mean, it means different things to different people, and this is one of the problems is that you have to really try and get a definition. So I mean, I've had a stab of putting some methodology together and I can go through that. So you know what I'm talking about, if that helps.

J. Alex Tarquinio:

Yeah, that would be good and are there like do those terms actually mean slightly different things or are they synonyms Dark fleet, shadow fleet, gray feet or is there like a subtle difference? in the meaning.

Michelle Wiese Bockmann :

It's just the, you know, pick a word. Some people call it the parallel fleet because it now operates parallel to ordinary. You know, established international regulations.

J. Alex Tarquinio:

But actually it would be good you offered and I think it'd be really helpful for listeners who maybe have heard these terms but aren't, you know, maritime security experts. Maybe you can start by actually describing what the dark fleet is for our listeners and how it operates.

Michelle Wiese Bockmann :

Okay, so, in terms of methodology, a dark fleet, usually a tanker, because they're shipping oil and sometimes natural gas, liquid petroleum gas. Generally they're elderly, so they're aged 15 years or over, and that's because there's less of a market for them in the established market. They're also anonymously owned, so the ownership is hidden behind Byzantine corporate structures in jurisdictions where it's impossible to determine who the ultimate beneficial owner is. That's not unusual in shipping, but this is overly complex, layer upon layer upon layer. Then, of course, they have to be solely engaged in these trades, so it's not as if the tanker picks up a Saudi cargo and delivers it to the US and then goes back and gets a Russian one. These vessels exist purely for this, to be deployed in these trades. And then, finally, they have to be engaged in a range of deceptive or illicit shipping practices. Finally, they have to be engaged in a range of deceptive or illicit shipping practices. So that can range from doing ship-to-ship transfer of oil in international waters to escape port state control scrutiny, or it can be those overly complex structures. It can be spoofing their location, so using their vessel tracking transponders to show they're in one place when they're really in another. And there's flag hopping. I could go on with the range of deceptive practices.

J. Alex Tarquinio:

What is flag hopping? How does that work?

Michelle Wiese Bockmann :

Well, so every ship has to register under a flag or under a particular country, and that gives them the right to sail. And there's a lot of what we call open registers, and so normally a ship will, during the course of its ownership, with one person will, be registered in Panama or Liberia or the Marshall Islands. They're the top three flag states, as we call them.

Michelle Wiese Bockmann :

But what we're finding now is that, with the increasing prevalence of sanctions, which have really ramped up in the last six months, the flag states have been lent on. There's been a lot of soft diplomacy to say to Panama, for example look, we're the UK, we've sanctioned this tanker, you must deflag it. And so Panama has agreed to do this. They happily deflag the tanker, and then that tanker goes to a lot of the opportunistic flag registries that have set up in Gabon, cameroon, san Marino, gambia, I could go on, and they'll go to those registries and then they'll flag there and of course, that registry will then be told that no, you must deflag it. And so you're seeing ships at the moment that will flag hop. So they've gone to three or four flags in the last eight months to keep one step ahead of regulators and continue trading.

J. Alex Tarquinio:

Has there been a big increase in the business in those? I don't know if it's fair to call them secondary flag states.

Michelle Wiese Bockmann :

They've exploded. I mean, I've never seen this going on in my 25 years of looking at the industry. But you've seen sort of like I call it regulatory arbitrage, where the ultimate owners of these ships are looking for the place where they're going to have the least oversight, the least scrutiny. And then you see countries like. A great example at the moment is Gambia, which decided that they would give a contract to a company in Cyprus to operate the registry on their behalf and they got that contract in May. And since May that registry has gone from having a handful of tugs and fishing vessels in its fleet to having over 40 tankers, most of them involved in either Iranian or Russian shipping, and a lot of them sanctioned, because clearly the owners of those sanctioned vessels know that even though they've got a US sanction on them, Gambia's manager isn't looking very closely, so they continue trading. And then you've also got falsely flagged vessels, where they've gone to fraudulent registries that don't really exist. They're just go-daddy websites, or I think I found one that was just completely made up registries and just pretending to flag.

J. Alex Tarquinio:

Is Cyprus a key state in these registries? Many years ago, when the UN was trying to work on reunification attempts on Cyprus, I did actually cover it and live there for a bit, with the division and the unrecognized Turkish part, and also, you know, there are obviously a lot of Russians living there at that time, maybe even more now, or who have a second residence there.

Michelle Wiese Bockmann :

Well, yes and no. It is the center. So I think Sierra Leone, gambia, sautoma and Principe and there's a couple other privately Cyprus Incorporated companies that are operating on behalf of these vessels, but really so, just to be clear, the vessels would be flagged in a country such as Gambia or any of those you just mentioned, but their registry would be in Cyprus. Is that how I understand it?

Michelle Wiese Bockmann :

Yeah, so they've contracted private companies to operate on their behalf, and sort of everyone gets cut, and of course, this has been quite an opportunistic business for a certain level of marine service provider, and so I often say that, when we're looking at the Dark Fleet and the challenges it poses, the EU and the UK have to get their house in order first, and the growth of these registries, often in tandem with companies that are domiciled in the EU or the UK, needs to be addressed.

J. Alex Tarquinio:

There are sanctions going after the Dark Fleet, for example, sanctions to particular ships, and is it effective? Or is it a bit like whack-a-mole, where they just move from one registry or one flag state to the next?

Michelle Wiese Bockmann :

Well, that's a big question. Have sanctions been effective? I think, as a foreign policy tool, sanctions have actually driven the creation of the dark fleet and then the imposition of sanctions directly on the vessels that are now shipping the oil to circumvent the sanctions that were created in the first place. It's been really challenging. Eu and UK sanctions have kind of been effective in the sense that they have made logistics more challenging, but they have also facilitated more deceptive shipping practices.

Michelle Wiese Bockmann :

You know those ship-to-ship transfers that I was talking about, the flag hopping, and we're currently seeing in the Baltic Sea ships that are, you know, for all intents and purposes, unflagged, uninsured, without all the safety mechanisms that you need to make sure that a ship you know ship that's going to sail through those environmentally sensitive areas with a million tons of oil on board, they're all gone because these ships have been driven by sanctions to those fringes. So while they have made it more challenging, they have not really stopped things. And of course you also have to look at the complicity by the receiver of the cargo. So if we look at Iran, most of the recipients are oil terminals in China, and when you look at Russian oil, that's also China and mainly India, and so those ships need to pass port state control checks in order to birth and to discharge their cargo, and that's happening despite the sanctions.

J. Alex Tarquinio:

So, even though dark fleet ships are engaging in deceptive practices turning off their transponders, transferring oil at sea, ship-to-ship transfers you think there's still some complicity with the port authorities? They should be able to see around those practices. Is that what you're saying?

Michelle Wiese Bockmann :

Absolutely. I mean, the new Trump administration has sanctioned several oil terminals in China. They have also sanctioned a lot of these ships. I think 70 ships have been sanctioned since the inauguration for Iran alone. And you know, I look, I track them every day and I look at them. They've got no flag whatsoever and there they are at a particular terminal in Northern China discharging. I mean, these vessels are. They're really hiding in plain sight. And you know it's the metaphorical two fingers to the Western governments, from both the Russian and Chinese governments, because I know everybody knows it's written about and watched daily.

J. Alex Tarquinio:

And you mentioned that these are primarily tankers with oil and maybe some liquefied natural gas super cool gas you can transport on tankers, and the origin of that, of course, is the sanctioned countries Russia, venezuela and Iran. What about, just as an aside, what about North Korea? They also have sanctions. It's mostly on other types of goods, though, so those would be more cargo ships. Is that also run by a dark fleet? Are they coming in just on Chinese regular ships, or is there also some dark fleet practices there?

Michelle Wiese Bockmann :

Well, I'd like to say that North Korea is the OG of the dark fleet, really, if you look at some of the UN reports from the experts that have produced some really compelling examples of deceptive shipping practices right through from you know what we would call identity theft, where they have tricked the International Maritime Organization, which is a United Nations agency, into issuing IMO numbers for vessels that don't exist.

Michelle Wiese Bockmann :

So these numbers, you know, are issued when a vessel is built and it stays with the vessel for its entire life, no matter how many different names and flag changes it has. You know, north Korea organized a system to pretend to build a vessel and then swap IMO identities and do all sorts of skullduggery, and those techniques have been replicated and gone on steroids in Russia. Report on North Korea is no longer being published. There are still plenty of reports that outline all of these different tactics, which are becoming increasingly sophisticated as governments and ship operators learn how to mess around with AIS automatic identification signals to make ships do weird and magical things, which is very dangerous on a navigational basis as well.

J. Alex Tarquinio:

Yeah, there are many secondary effects. Obviously, the risks to navigation, the legitimate or the recognized fleet the fleet is not the dark fleet. There's risk to that. Also, insurance I'm assuming that these dark fleet vessels are not insured.

Michelle Wiese Bockmann :

Well, we don't know because, unlike the rest of the industry, when it comes to marine insurance and insuring against marine oil spills, there's an international group of 12 clubs. They insure now about 86% of the world's tonnage, but the dark fleet operate outside that and they have insurance on paper. I've tracked some absolutely dodgy companies that have fraudulent websites. There was one that pretended to operate from Norway that really operated from Russia. It's now been shut down.

Michelle Wiese Bockmann :

But if there was an oil spill they are not able to meet liability. And again that's on the flag states. So these flag states are meant to check that these marine insurers are able to cover the cost if there was an oil spill and meet their obligations, and of course they can't and that's just not being checked. And bear in mind, if a ship an AfriMax-sized vessel, which is the size of a tanker that would ship out of the Baltic if that had an accident while it was sailing through the Baltic Sea and down the English Channel to India, that's about a billion dollars worth of damage. That's why coastal states are so worried about the environmental threat these poorly maintained, elderly rust buckets represent to those areas.

J. Alex Tarquinio:

Well, coastal states and also particularly small island states, I mean, would be at risk. They would have fewer resources to clean it up and there wouldn't be. We all remember the Exxon Valdez and other crises where there were spills but there was a large company behind that to lead the cleanup, and presumably that would not be the case for the dark fleet. No, are there any accidents or oil spills we can already definitively attribute to the Dark Fleet?

Michelle Wiese Bockmann :

Well, there have been a few near misses, like there was one on a tanker called the Pablo, and so that was an Afromax tanker and that was in an area off east of Malaysia where a lot of dozens and dozens of these tankers gather and that's a very popular area to do ship-to-ship transfers and to sort of wait and to store oil. That Afromax exploded, killed a lot of crew, but it was in ballast. That means it didn't have a cargo on board. Had it had a cargo on board, the whole world would have known about that. So that was a near miss.

Michelle Wiese Bockmann :

And then there was one not so long ago called the Cirrus 1. Again, that was in that area, it was spoofing its location and it collided with a tanker, a product tanker that was properly flagged and one of the most respected tanker owners in the world. It collided with that tanker, it had a cargo of naphtha aboard and there was minor spills, but that was it. But once again, that highlighted those navigational dangers. I've maintained that the Dark Fleet is a very serious accident waiting to happen and I'm literally surprised there hasn't been one by now, simply because the condition of these ships is so terrible.

J. Alex Tarquinio:

Well, it's obviously a risk to the sailors on the dark fleet ships, certainly and presumably because they are working under those conditions. They may not be the most experienced sailors, but it is of course a risk to the established ships, for example if there's a collision.

Michelle Wiese Bockmann :

Well, I've spoken to some seafarers that are on these ships and you have to bear in mind every one of these ships employs about 25 seafarers and you know they're not terribly well paid. They're, you know, the unsung heroes of globalization and world trade really Poorly paid. They don't really know when they get on a ship that they're going to be asked to do and get involved in these illicit activities. I mean, maybe the master in some cases is an exception to that, but the rate of seafarer and vessel abandonment has never been higher. That's at world records. And when you look at the ships that have been abandoned, many of them are either flagged by these flag states and they're attracting really terrible poor quality tonnage, or they're dark fleet tankers that there's no use for them anymore and so they're just abandoned.

J. Alex Tarquinio:

And you mentioned, many of these are older vessels, 15 years or more. I mean, it's not simply that they may not be as well maintained. The standards for tankers are different now than they were, for example. I mean, are some of them so old that they might not have double hulls? Or, you know, they might not be double hulled? No, they're not that old.

Michelle Wiese Bockmann :

They're all double hulled. I mean, the average age is about 22 years. Okay, most ships they have to adhere to a set, they have to have regular surveys and adhere to a series of certificates and inspections done by what we call classification societies or recognized organizations, to make sure that this vessel is structurally safe and seaworthy. There have been cases where we know that these ships owners are choosing recognized organizations that aren't going to look too carefully or where they can provide false information, knowing that it's just going to be ticked. I mean, a lot of this is about tick boxing and just being able to get the cargo through. It's absolutely insane how little oversight there is for these very, how little oversight there is for these very, very old ships.

J. Alex Tarquinio:

The Trump administration has been talking about secondary sanctions, essentially if Trump runs out of patience with Putin in the negotiations to end the war in Ukraine. If they were to go after it more effectively, could they do something about the dark fleet, or is that just likely to increase the size and complexities of the dark fleet?

Michelle Wiese Bockmann :

Well, I would probably say let's have a look at what happened with Iran and how that's working out for them Not terribly well. Trump likes to go on about his maximum pressure zero exports. That's not been achieved in the six years since sanctions were reimposed on Iran.

Michelle Wiese Bockmann :

Six years since sanctions were reimposed on Iran and when Trump when he was in office the first time, exports were more or less at the same level they were today, I think you know, anywhere between 1.4 to 1.8 million barrels per day, and that figure, no matter how many sanctions you put and extend on the dark fleet, that hasn't stopped the flow of oil because you have complicity from Iran and complicity from China. You know where the ships take on the cargo, where the ships are discharged, and when they sail they have the right of innocent passage through areas of the sea where they you the sea, when they go through Singapore Straits. So people often say why don't you just stop the ships? Well, you can't because of international conventions, and so I very much doubt that secondary sanctions will do anything other than drive more tankers into the market and perhaps drive even further numbers to the fringes and outside global regulation.

J. Alex Tarquinio:

On the other hand, the impetus behind these sanctions is really twofold One is to create leverage in any negotiations with Russia, but another is to limit the income that Russia makes from its sale of oil and gas which is directly fueling the war. So of course you're anticipating my next question Perhaps it's not stopping these shipments of the dark fleet, but is it reducing the profitability of those oil and gas shipments for Russia and hence reducing the amount of money that they have to spend on their war in Ukraine?

Michelle Wiese Bockmann :

Well, of course we get to the oil price cap, which was, I believe, very much a flawed policy, because that under the cap, western marine service providers can get involved in shipping Russian oil to third countries as long as they can prove that the cargo was sold below $60 a barrel for crude, $100 a barrel for refined products for crude, $100 a barrel for refined products. At the moment, the oil price cap, the cost of urals grade crude and I think maybe even some of the other grades, is below $60 a barrel simply because of global market conditions, and so that hasn't reduced the income. When the oil was priced above the cap, yes, there was a discount to Brent, which is the most traded oil index, but that gap has narrowed over the years. So you could argue that there has been income lost as a result. But the oil price cap, it only really works when the cargo is priced below global prices.

J. Alex Tarquinio:

Well, of course, the oil price cap was set years ago, when the price of oil was much more elevated than it is today. I mean, should that be changed? Should it be responsive? Should it be actually a discount to Brent instead, of, I mean, $60? Sounded cheap a couple of years ago, but it doesn't today.

Michelle Wiese Bockmann :

When the oil price cap was designed, you remember, it was just after Europe had been shut off from natural gas and there was a massive price spike and there was global inflation as a result, and so I think the regulators back then were very, very worried about removing oil from the market and they wanted to prevent this inflation-inducing price spike.

Michelle Wiese Bockmann :

And of course, the global economy is very different now, and so is the oil market, so potentially they could fiddle around with the oil price cap, but from looking at it and how it's worked from my point of view, I think it's been a failure, because the ultimate result has been a tripling of tankers in the dark fleet since it was imposed and ultimately, I think you really want to get that oil shipped on safer, newer ships. And what we have seen since crude oil fell below the price cap in Russia we've seen more private Greek-owned vessels tankers come in to take the business, because it's quite lucrative business and I think that's moving greater numbers onto better quality tonnage and that's a good thing for safety and that's a good thing for the environment.

J. Alex Tarquinio:

There's more private Greek-owned vessels. But then you said they're. Are you talking about in the dark fleet or taking business from the dark fleet?

Michelle Wiese Bockmann :

Taking business Taking business, taking business, yeah. So what's happened is that a lot of private Greek-owned tankers have always been in the business and shipping out of Russia, especially because diesel, which is another major export, has priced below $100 a barrel Goodness, I think, nearly for the last 18 months. So there's always been a subsection of tonnage that has been compliant with the price cap that's been shipping out of Russia. But what we're finding now is that there are more Greek-owned tankers that are shipping euros crude, because it's below that $60 a barrel cap, which in a way, has made shipping safer because there's more oil going on, better quality, better regulated tonnage that is properly insured under the international group. So that's a good thing and it sort of negates the need for any capital now, because what you want is to get oil off those ships, those dark fleet ships, because I think we've all agreed that they're they're not very safe and these are smaller.

J. Alex Tarquinio:

Well, I think most shipping companies are privately owned. These are smaller privately owned Greek shipping companies.

Michelle Wiese Bockmann :

There's about four or five billionaire Greek ship owners that specialize in this business.

J. Alex Tarquinio:

Now remind me. There's some superlative in Greek shipping. They're either the largest ship owning country, Largest ship owning nation, Largest ship owning nation. Now, what does that mean exactly? Does that mean they own the most number of ships or the most tonnage? Or how does that define?

Michelle Wiese Bockmann :

All of the above, all of the above.

J. Alex Tarquinio:

And those are private, private millionaire ship owners. Yeah, mostly To Americans. We remember Jackie O and Onassis, so basically Onassis type figures who are large individual ship owners.

Michelle Wiese Bockmann :

Who are large individual ship owners, yeah, I mean a few of them have companies listed on the NASDAQ or on the New York Stock Exchange, but they don't tend to get into that business because of the reputational risk being publicly listed.

J. Alex Tarquinio:

Are we talking about a relatively small number of billionaire ship owners? How many individuals are we talking about?

Michelle Wiese Bockmann :

They would all tell you that they're not actually billionaires. They're the taxi drivers of global trade, they would describe themselves. There's probably 50 or 60 big names in Greece that dominate in the shipping world and within the tanker world, maybe about 20, 25. Oh, wow, and they consider themselves the taxi drivers of global shipping, very humbly, of course, while earning hundreds of millions when the market is good.

J. Alex Tarquinio:

I guess when the market is poor, that would be like during economic crises. By the way, aren't we seeing a big decline in shipping now because of the uncertainty over the Trump administration tariffs? I mean, we keep hearing stories about Long Beach seeing a huge decrease in shipping.

Michelle Wiese Bockmann :

Well, volatility is always good for shipping. There's always winners. In COVID, for example, initially, if we're speaking on tankers, oil demand dried up. Initially rates were really bad, but when demand returned it exploded and you had really strong rates, strong returns. Plus. You also had a recalibration of global oil trade, with the Houthis shutting down the Red Sea, with the imposition of sanctions on Russia, and that sort of volatility is really good for tankers, for tankers and when it comes to container shipping, what happened with COVID is when there was that interruption to global trade and it resumed, the logistics were all muddled up and that resulted in huge profits for container ships because rates skyrocketed. I'm not sure how things are going to pan out on container shipping, because that's a completely different area that I'm looking at, but it's all too much for me, I have to say, is Greece primarily the tankers and the container shipping.

J. Alex Tarquinio:

Is that more China, or am I stereotyping there?

Michelle Wiese Bockmann :

Well, the world's biggest container ship operator is actually MSC Mediterranean Shipping Group, which is based in Switzerland. So there you go, so Switzerland's actually just by A nice landlocked country industry really, but, yeah, a lot of the operators. And then of course you have to look at the ownership, of the tonnage that they may lease or charter or own. It all gets very, very complicated.

J. Alex Tarquinio:

And you mentioned that the Greek shipping companies. That was actually bringing some more safety having them shipping at the Urals rather than the Dark Fleet ships.

Michelle Wiese Bockmann :

Yeah, because you know who the beneficial owner is and you know they have insurance.

J. Alex Tarquinio:

That's the main thing. Not only do they probably have newer vessels and maybe more experienced crew, you also are confirmed that they have insurance and, I guess, a paper trail.

Michelle Wiese Bockmann :

Yeah, and they operate within the international law of shipping. I mean this dark fleet. If you're just speaking on tankers, we're looking at about 18% of the internationally trading fleet.

J. Alex Tarquinio:

Now has that increased dramatically over the last three years or so since Russia's full-scale invasion.

Michelle Wiese Bockmann :

So when I started looking at this, when sanctions were reimposed on Iran so that was back in 2018, 2019, it all started from a cluster of about 35 ships. After OFAC, the Office of Foreign Assets Control, sanctioned, I think, some Chinese division of a tank company owned by Costco, china's government-owned shipowner, and that's when everything sort of started being driven underground, and so that was 35. Then, I think when Russia invaded Ukraine, it was at about 250. And today it's at 700, plus tankers.

J. Alex Tarquinio:

The culture of the maritime industry. Are there any cultural productions that you like for seafaring? I mean, do you like to watch movies about? No, or do you need to get away from? Was that a busman's holiday? Do you need to get away from that in your time off?

Michelle Wiese Bockmann :

Well, I'm kind of all consumed by the maritime space at the moment. I do have an app and I check my dark fleet ships on an app which I think is terribly tragic. So you know, I've got some special, very special ships that I keep an eye on. So this is a marine traffic app, but it's fantastic. It's open source, but you can literally put in the name of a ship and you can see where it's going. And I always think of these 700 plus tankers as being recalcitrant children, and so if I've got a special interest in one, I'll just see what it's doing today.

J. Alex Tarquinio:

So there are 700 plus tankers in the Dark Fleet. That we know. Is that what you're saying? According to my methodology, yeah. Okay, so there's 700 plus tankers, but among those there are a few that you find particularly intriguing, and you'll keep an eye on them with your app.

Michelle Wiese Bockmann :

Yeah, while I'm watching TV at home. That's a very sad admission app. Yeah, while I'm watching.

J. Alex Tarquinio:

TV at home. That's terrible. That's a very sad admission. So there really isn't a difference between your work time and your free time.

Michelle Wiese Bockmann :

The maritime is an all-consuming passion. It is, it is, and especially at the moment. You know volatility and geopolitical uncertainty, you know you have to be really on 24-7 because so much can change Like in between flying back from Malta and I got in at one o'clock in the morning, went to bed, woke up and, estonian there'd been some attempted interdiction by Estonia's navy to a falsely flagged tanker and Russia had sent up a plane to escort it into its waters. This huge international incident. And you know I'd had been on a plane and I missed it all.

J. Alex Tarquinio:

Well, and that was a huge international incident, and the interesting thing is that I learned from that is I guess within the Baltic Sea there is a sliver that is not within the 12 nautical miles that's Estonia or Russia there's a small sliver of international water. Is that correct?

Michelle Wiese Bockmann :

Well, this ship had the right of innocent passage, but what happened is that all the governments there, all the maritime authorities, have decided that they're going to radio these ships that have suspect insurance and get information. And this ship, not only did it refuse to give any directions, but it was ordered to go into Estonian waters and in the other cases the master has agreed to do so and then the ship's been seized or detained, but the master refused and continued to exercise the right of innocent passage, even though you could legally argue that as a ship without a flag, it had lost its right to innocent passage. But it was a really crucial flashpoint for what really shows that the limits that European governments have on these ships going through their waters, even when they're reaching unclosed conventions.

J. Alex Tarquinio:

And does the law of the sea does it require a ship to comply with the local authorities, even if it's just outside of their waters in international waters? It's just outside of their waters in international waters.

Michelle Wiese Bockmann :

Well, I'm not sure, but I think this is really. It's untested, because normally a master, if he's asked by a maritime authority in the waters through which he's sailing, even when during an international navigation, most masters would be trained and taught and you would indeed expect them to do so. But in this case it didn't happen and that was the reason, I think, why things flared.

J. Alex Tarquinio:

No, that was a very interesting incident, the geopolitics being as strange as they are now. Do you look at the nationality of a captain or a master? I mean, when you're analyzing an incident like this after the fact?

Michelle Wiese Bockmann :

Well, not really. I mean, first of all you look at the flag state. We look to see if you can find out who the beneficial owner is. Obviously, with a dark fleet tanker you don't know, but you would look at the flag state. That will often tell you, especially with dark fleet tankers, its affiliation. In this case it had been affiliated to both Gabon and Guinea-Bissau, both registers used for Dark Fleet. The ISM manager was in, I think, india, which indicates Indian crew. These ships are typically in the cases where we do know about the crew on board. In the cases where we do know about the crew on board, they have Azerbaijan or Russian masters or senior people on board. I've seen before. But yeah, there's just you know, the registered owner is maybe a brass plate company in Seychelles or Mauritius, so it can be anything.

J. Alex Tarquinio:

Now the beneficial owner is the owner of the ship and not the cargo, correct. But that beneficial owner may be in a country that's quite different from where the ship is actually registered.

Michelle Wiese Bockmann :

Yeah, so the beneficial owner likely is probably related to trading house that is linked to one of the Russian oil companies.

J. Alex Tarquinio:

Okay, so in the case of the Dark Fleet, we're talking about shipping Russian oil, so that makes sense. Are they also self-insuring?

Michelle Wiese Bockmann :

and basically, doing everything in Russia to get around the sanctions. Some of them are, but it depends on each ship, different circumstances for each of them.

J. Alex Tarquinio:

But so your role as an analyst, or part of your role as an analyst, is to look at these online breadcrumbs this app, for example but also try and trace it back and figure out who the beneficial owner is.

Michelle Wiese Bockmann :

Yeah, and sometimes documents just happen to fall off the back of a truck and make their way to me legally of course, and that gives me extra insight as well Right right Through, perhaps, a signal chat, but I don't plan wars on signal, I just want to have you know that.

J. Alex Tarquinio:

That's very important, thank you. No war planning involved, no warplaning involved, and so this data that you're coming up with, seeking beneficial owners and flag registries does this help anticipate threats perhaps?

Michelle Wiese Bockmann :

see that okay we have a ship that may be suspect that's approaching the. Baltic. I look at them on my app and I can tell you that's Starfleet, that's Starfleet, you can just tell.

J. Alex Tarquinio:

It sounds like the kind of work I would expect to be done by Interpol or the FBI, the MI6, the NSC. I mean, I could understand as a journalist I very well understand the value of having an independent eye but are you doing the same kind of work that's being done by Interpol or MI6 to look at the ownership of these ships? I don't know, that's true.

Michelle Wiese Bockmann :

How would you know? I don't know. You'd like to think that they're watching as closely as myself and a lot of other people that follow the dark fleet, because of the very, very grave risk it represents. Let's hope so.

J. Alex Tarquinio:

And if there are risks detected or, you know, heaven forbid if there is an incident, either a loss of life or an ecological disaster, the agencies then involved after the fact would be those agencies we talked about.

Michelle Wiese Bockmann :

Yeah, If there's an accident, everybody will be squealing saying why didn't you tell us this? Why didn't anybody do anything? You know there will be absolute carnage. You know political carnage over an incident if it all goes wrong, and you know people like me will. You know, we've been talking about it for years and years and years, so you can only hope that somewhere. You know the regulators, governments, are doing what they can.

Frank Radford:

And that's it from the Delegates Lounge. We'd like to thank our esteemed guests who've graciously allowed us to share their hard-earned insights into what really matters. And then there's you, our listeners, who we hope are sufficiently edified to clamour for more of the same. Do drop in for a weekly episode on Thursday, or from time to time if we're on the road, for special events, in which case there'll be a bonus episode. Subscribe wherever you listen to podcasts There'll be a bonus episode.

Frank Radford:

Subscribe wherever you listen to podcasts and if you like what you've heard, please take a moment to rate or review the show, as it helps others who share your abiding interest in world affairs to find their way to the Delegates Lounge. You can connect with us on many popular social media platforms or reach out to us directly at infothedelicatesloungecom. We're a small team, so we can't respond to every message, but we will read them. We're a small team so we can't respond to every message, but we will read them. Our show this week was written and produced by the host and by yours truly, executive producer Frank Radford. Until next time, keep calm and curious.