Australia has, for the first time, imposed sanctions on Russia's so-called "shadow fleet" of oil tankers, targeting 60 vessels used to circumvent international sanctions and sustain the Kremlin's war effort in Ukraine, the Australian government said on June 18.

The move aligns Canberra with similar measures introduced by the United Kingdom, Canada, and the European Union.

Australia's Foreign Ministry said the sanctioned vessels operate under "deceptive practices, including flag-hopping, disabling tracking systems and operating with inadequate insurance," enabling illicit Russian oil trade that undermines international sanctions.

"Russia uses these vessels to circumvent international sanctions and sustain its illegal and immoral war against Ukraine," the ministry said in a statement.

With this move, Australia has now sanctioned more than 1,400 Russian individuals and entities since Moscow's full-scale invasion of Ukraine began in February 2022, the government said.

The step comes amid the continued operation of Russia's shadow fleet. According to a recent study by the Kyiv School of Economics (KSE), Russia currently operates 435 tankers outside the control of Western regulators to evade sanctions such as the G7-EU price cap on Russian oil.

These vessels are typically un- or underinsured and pose a rising environmental risk due to their age and operational opacity.

KSE estimates that as of April 2024, 83% of Russia's crude oil and 46% of its petroleum product exports were shipped using shadow fleet tankers. The study warns that this undermines the effectiveness of Western sanctions and increases the likelihood of maritime disasters, as many of these ships fall outside international safety and insurance standards.

The EU formally adopted its 17th sanctions package against Russia in May, sanctioning nearly 200 vessels tied to the shadow fleet. EU foreign policy chief Kaja Kallas said the new measures also target hybrid threats and human rights violations, with more sanctions under consideration.

Some EU member states and observers have criticized the package for lacking stronger provisions to disrupt Russia's sanction evasion schemes.

Now, the EU seeks to approve its 18th sanctions package, which will add 77 more shadow fleet vessels to comply with the cap to prevent Russia from circumventing sanctions and propose imposing a ban on imports of petroleum products made from Russian oil.

The United States has signaled reluctance to pursue additional sanctions despite Moscow's continued aggression in Ukraine and rejection of ceasefire proposals supported by Western allies.

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EU High Representative Kaja Kallas urged the European Union to press forward with lowering the oil price cap on Russian crude, even without U.S. support, warning that Middle East tensions could otherwise drive prices up and boost Russia’s revenues.

The Kyiv IndependentAnna Fratsyvir

An uninsured Russian Aframax-class tanker has been illegally conducting ship-to-ship oil transfers in international waters near Greece and Cyprus since July 2024, Ukraine's military intelligence (HUR) reported on June 16.

According to the agency, the vessel, operating without Western insurance, is part of Russia's expanding shadow fleet used to bypass G7 and EU sanctions on Russian oil exports.

HUR said such transfers "pose an environmental threat, allow the aggressor to conceal the origin of oil, evade international control, and ensure its supply to third countries in circumvention of sanctions."

Ukraine has identified the tanker as IMO 9247443 and listed it on the War&Sanctions platform, along with 159 other tankers allegedly belonging to Russia's shadow fleet and 55 captains involved in sanction-busting operations.

Despite price caps and Western restrictions, Russia continues to profit from oil and gas exports, which remain a vital revenue source. According to HUR estimates, roughly one-third of those profits are expected to fund Russia's war against Ukraine in 2025.

In May, the EU approved its 17th sanctions package, targeting nearly 200 shadow fleet vessels. The U.S. Treasury had earlier sanctioned over 180 tankers, which together accounted for nearly half of Russia's offshore oil shipments.

While the Biden administration ramped up pressure on Russia's oil trade early in 2024, U.S. President Donald Trump has since declined to impose new sanctions, despite Moscow's continued refusal to agree to a ceasefire.

EU leaders call for tougher sanctions on Russia at G7 summit

“To achieve peaceful strength we must put more pressure on Russia to secure a real ceasefire, to bring Russia to the negotiating table, and to end this war. Sanctions are critical to that end,” European Commission President Ursula von der Leyen said.

The Kyiv IndependentAbbey Fenbert

A German official has called on the European Union to take a "closer look" at the issue of frozen Russian assets and using them to support Ukraine, stressing the need to take a harder stance against the Kremlin.

Thorsten Frei, Head of the German Chancellery, stated in an interview with the Frankfurter Allgemeine Sonntagszeitung on May 31 that the EU should "take a much closer look at the issue of Russian state funds than we have so far."

He also urged the EU to take a more assertive position against Moscow, adding that "we must not allow the game that Russia is playing with us to go unchallenged."

The question of frozen Russian assets, and what to do with them, has been discussed by the EU and other Western countries since the start of the full-scale invasion. Recently, the Group of Seven – including Germany – pledged to keep Russian assets frozen until the end of the war.

Frei's comments suggest that Germany's new Chancellor Friedrich Merz may be open to the idea of seizing the approximately €200 billion ($227 billion) in Russian state assets in the EU.

Frei also mentioned the 18th package of EU sanctions currently under preparation, citing them as an example of tougher measures against Russia. According to Frei, the upcoming sanctions are a response to Russian President Vladimir Putin's refusal to comply with demands for a ceasefire.

"Measures are being prepared that are tougher than before, and which some European states have therefore shied away from so far," Frei said, stressing that the sanctions package will have "far-reaching punitive measures."

Frei added that the sanctions package will target Russia's shadow fleet, energy sector, financial sector, and Nord Stream pipelines.

"If you want to achieve a ceasefire by peaceful means, then your tools are limited," Frei said. "That is why I am very much in favor of using the tools at your disposal."

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The Kyiv IndependentTim Zadorozhnyy

Russia has tripled its projected budget deficit for 2025 amid a sharp drop in oil revenues, driven by Western sanctions and plunging crude prices, President Volodymyr Zelensky's commissioner for sanctions policy, Vladyslav Vlasiuk, said on May 29.

According to Vlasiuk, the Kremlin has recently approved changes to its federal budget, increasing the planned deficit from 1.17 trillion rubles ($14.8 billion) to 3.8 trillion rubles ($48.3 billion), or from 0.5% to 1.7% of GDP.

"The reasons? Cheaper oil and a strengthening ruble, which together are slashing oil and gas revenues by nearly a quarter — a loss of 2.6 trillion rubles ($33 billion) from the original forecast," Vlasiuk wrote in a statement. He pointed to a revised price forecast for Russia's Urals crude, cut from $69.70 to $56 per barrel.

Reuters reported earlier this month that Urals and ESPO crude blends dropped to $48.90 per barrel — the lowest level in two years and about 40% below the $82.60 price Moscow had initially budgeted for 2025.

Vlasiuk said international sanctions remain a key driver behind the decline in Russia's energy revenues. "Sanctions against Russia are working," he said. "This is confirmed by many indicators, and we are grateful for all the work that has already been done."

Ukraine has long been advocating for tighter sanctions against the Russian energy sector, particularly its shadow fleet. Despite hundreds of Russian tankers already under sanctions, many vessels remain operational and continue to ship Russian oil.

"Half of the sanctioned shadow fleet is still functioning," Vlasiuk said, calling for expanded measures — including sanctions on Russian ports, terminals, and even individual ship captains.

Russia's energy sector, which provided nearly 30% of the federal budget in early 2024, has been hit by drone strikes from Ukraine and increasing global pressure. The recent plunge in prices followed new tariffs announced by U.S. President Donald Trump on April 7, which spurred fears of a global recession and dragged oil prices to their lowest levels since May 2023.

Speaking on May 5, Trump claimed that Russia had become more willing to negotiate an end to the war in Ukraine due to falling oil prices. "I think Russia, with the price of oil right now, oil has gone down, we are in a good position to settle, they want to settle. Ukraine wants to settle," he told reporters.

The financial strain comes as Moscow boosts defense spending by 25% for 2025, raising it to 6.3% of GDP — the highest share since the Cold War. The Kremlin has acknowledged the challenges, with spokesperson Dmitry Peskov calling the global market conditions "extremely turbulent" and vowing economic measures to "minimize the consequences."

For Ukraine, Vlasiuk said the latest data sends a clear message: "We are grateful for all the work done so far... But if we want to level up, more needs to be done."

The U.S. recently blocked a G7 push to lower the $60-per-barrel price cap on Russian oil exports, the Financial Times reported on May 27. The cap, imposed by the G7 and EU in December 2022, bars Western firms from servicing Russian oil sold above that price to limit Moscow's war funding.

While Canada, the EU, and key G7 members supported tightening the cap, the proposal was dropped after U.S. Treasury Secretary Scott Bessent withheld support. The European Commission had reportedly planned to propose cutting the cap to $50.

Sanctions on Russia are working, Ukraine just needs more

Sanctions on their own won’t end the war, but they are a crucial tool in the West’s efforts to pressure Putin.

The Kyiv IndependentDominic Culverwell

Cooperation between the United States and the European Union on preventing Russian sanctions evasion has broken down, Süddeutsche Zeitung reported on 27 May. According to a cited leaked internal report from Germany’s Foreign Ministry, the EU’s Special Representative for Sanctions, David O’Sullivan, told a closed-door meeting of the EU Foreign Affairs Council on 20 May in Brussels that there is “no joint outreach” with the US anymore. He also noted that G7 cooperation on the matter had “lost momentum.”

The leak suggests that European hopes for a united front against Russia’s sanctions circumvention are rapidly eroding. While a new 18th package of EU sanctions is being prepared in response to renewed Russian attacks on Ukrainian cities, the lack of US participation raises doubts about global enforcement capacity.

Trump’s presidency and Chinese role in sanctions evasion

Süddeutsche Zeitung notes that some experts suggest that US President Donald Trump “would rather resume doing business with Russia today than tomorrow.” Normalization with Russia “will mean an end to the global sanctions regime,” Green MEP Sergey Lagodinsky warned. German MP Johann Wadephul warned that the new EU sanctions “will be financially painful for Russia” but acknowledged doubts about future American involvement, despite stating that “there will be a clear reaction from the West” to Russia’s attacking Ukraine instead of negotiating peace.

China plays a key role in sanctions evasion, the leaked report finds. EU sanctions commissioner David O’Sullivan told the EU Foreign Affairs Council that “around 80%” of such cases are tied to China, which denies involvement. Ukraine’s Foreign Intelligence Chief of Ukraine Oleh Ivashchenko said Chinese firms are supplying essential materials to 20 Russian arms factories.

EU cracks down on third countries, Russia’s shadow fleet, and eyes Russia’s energy and banking sectors

Despite the breakdown in US-EU coordination, the EU has reportedly achieved some success in blocking war-related exports via third countries. Export channels through Armenia, Serbia, Uzbekistan, and India have seen disruptions. However, Kazakhstan, Türkiye, and the UAE remain problematic transit points, the document notes.

Efforts against Russia’s so-called “shadow fleet” — tankers and cargo ships used to bypass sanctions — have seen some progress. According to O’Sullivan, multiple nations have stripped Russian-linked ships of their flags following EU pressure. However, he urged further measures against ports used frequently by these vessels, including those in Türkiye, India, and Malaysia.

The next EU sanctions package is expected to hit Russia’s energy and financial sectors, though Russia’s ally Hungary opposes these measures and has shown “no willingness to compromise,” the document adds.

On 24 May, Finnish defense minister Antti Häkkänen said on YLE’s “Ykkösaamu” program that Russia is now providing military escort to tankers from its shadow fleet in the Gulf of Finland. He described this as a “completely new feature” of Russian activity in the region.

While Russian naval and air presence in the area has always been noticeable, Häkkänen emphasized that armed protection of shadow fleet tankers through the narrow maritime passage is unprecedented. According to Häkkänen, as cited by YLE,

“However, a new feature is that Russia is protecting tankers from its shadow fleet in the narrow passage of the Gulf of Finland. There is military escort and the presence of armed forces. This is a completely new development.”

Airspace breach confirmed near Finland’s Porvoo

The Finnish Defense Ministry reported on 23 May that two Russian military aircraft violated Finland’s airspace near the city of Porvoo. This breach adds to a recent series of aggressive incidents at sea and in the air.

According to YLE, MTV Uutiset also reported a rise in Russian military traffic in the Gulf of Finland, citing naval sources. This comes as further confirmation of escalating regional tensions.

Last week, an incident occurred involving a vessel linked to the Russian shadow fleet that failed to comply with directives from Estonian authorities. At the same time, a Russian fighter jet was observed in the vicinity.

Russia is also significantly increasing its military presence near Finland’s eastern frontier. Recent images aired on Swedish television from Kamyanka, Severomorsk, and Petrozavodsk show what appear to be large-scale deployments. 

Finland says situation remains stable

Despite the growing Russian military activity, Häkkänen stressed there is no immediate threat to Finland.

“I don’t see any direct threat to Finland. But Russia is strengthening its military capabilities and is an aggressive and dangerous neighbor to all of Europe, that’s clear,” he said.