Russian Oil Sanctions: Shadow Fleet & Azerbaijan Traders Exposed | The Moscow Times
- A complex network of nearly 50 companies is facilitating the export of sanctioned Russian oil by concealing its origins, with traders linked to Azerbaijan playing a central role,...
- The investigation, published Friday, revealed that all 48 companies utilize the same private email server, a key indicator of their interconnectedness.
- One example cited is Foxton FZCO, a Dubai-based company whose domain uses the shared server and has exported $5.6 billion worth of Russian oil, the newspaper reported.
A complex network of nearly 50 companies is facilitating the export of sanctioned Russian oil by concealing its origins, with traders linked to Azerbaijan playing a central role, according to a report by the Financial Times. The network, operating as Russia’s so-called “shadow fleet,” appears to function as a coordinated effort despite being comprised of ostensibly independent firms operating from different addresses.
The investigation, published Friday, revealed that all 48 companies utilize the same private email server, a key indicator of their interconnectedness. The Financial Times identified 442 web domains relying on this shared server, “mx.phoenixtrading.ltd,” and subsequently matched those domains to companies listed in Russian and Indian customs documents as shippers of Russian crude.
One example cited is Foxton FZCO, a Dubai-based company whose domain uses the shared server and has exported $5.6 billion worth of Russian oil, the newspaper reported. In total, the companies within this network have shipped over $90 billion in Russian crude, though the actual figure is likely considerably higher.
The emergence of this network underscores Russia’s reliance on a shadow fleet of tankers and intermediaries to circumvent Western sanctions imposed following the full-scale invasion of Ukraine in . These sanctions aimed to restrict Russia’s ability to profit from its energy exports, a critical source of revenue for the Kremlin.
According to the latest available Russian customs data analyzed by the Financial Times, covering exports up to , more than 80% of Rosneft’s seaborne exports were handled through this apparent network. Rosneft, a state-controlled oil company, is a significant player in Russia’s energy sector and has been subject to international sanctions.
The tactics employed by this network echo practices seen in the 1990s, according to Sergey Vakulenko, a fellow at the Berlin-based Carnegie Russia Eurasia Center. “That’s how fortunes were made and taxes dodged by soon to become oligarchs,” he was quoted as saying. “But it’s a big surprise that one network has become so big and important to Rosneft. I’d have expected more sock puppets.”
This development comes as international efforts to enforce the price cap on Russian oil, established by the G7 nations, face increasing challenges. Russia has successfully circumvented these measures through the use of the shadow fleet, comprised of tankers that do not rely on Western insurance companies. The European Union is reportedly considering lowering the G7 price cap to $50 per barrel, a move intended to tighten restrictions and further limit Russia’s revenue.
Recent investigations have also highlighted the involvement of Azerbaijani traders with ties to Rosneft in facilitating the movement of Russian oil. British authorities have identified Etibar Eyyub and Tahir Garaev as central figures in this shadow trade system, reportedly close associates of Rosneft CEO Igor Sechin, who himself is under sanctions from the U.S., the EU, Canada, and other Western governments.
According to a report released by Britain’s National Crime Agency (NCA) in , Eyyub and Garaev were granted “privileged access” to Rosneft oil products, enabling them to trade more Russian crude in than any other entity. Their operations rely on a fleet of over 100 aging tankers employing deceptive practices, including disabling tracking systems, transferring cargoes at sea, and changing national flags to evade detection.
The NCA identified two distinct groupings within the network: a “blue” group that maintains a facade of legitimacy by working with Western banks and commodity exchanges, and a “red” group that handles the direct movement of Russian oil using companies with opaque ownership structures. Companies within the “blue” group, 2Rivers DMCC and 2Rivers PTE, were sanctioned by the U.K. Government in .
In , Britain further tightened sanctions targeting Russia’s shadow fleet, blacklisting 20 additional vessels, as well as 10 individuals and entities linked to the country’s energy and shipping sectors. These measures included asset freezes targeting Orion Star Group and Rosneft Marine (U.K.), and two U.K. Residents, Vladimir Pristoupa and Olech Tkacz, accused of operating a network that funneled over $120 million worth of high-tech electronics to Russia.
British Prime Minister Keir Starmer stated that these sanctions are “choking off” Russia’s ability to fund its war in Ukraine, claiming they have deprived Russia of at least $450 billion – equivalent to approximately two years of funding for the invasion. The U.K. Has sanctioned over 2,300 individuals, entities, and vessels since , and Starmer indicated a desire to coordinate further measures with G7 partners.
The ongoing efforts to circumvent sanctions highlight the challenges faced by Western governments in restricting Russia’s economic capabilities. The sophisticated network uncovered by the Financial Times and the involvement of key players with ties to Rosneft demonstrate the lengths to which Russia is willing to go to maintain its oil exports, a vital component of its economy.