Bob Fraser describes the oil shadow fleet, roughly 1,000 aging tankers that hide their ownership and sail under false flags to move sanctioned oil. Originally built to sell Iranian oil to China and India at discounts, the fleet exploded after Russia's invasion of Ukraine. The U.S. recently began seizing these vessels in Venezuelan waters, signaling a shift that could reshape how sanctions work.
there's been emergence in the last few decades of what's called the shadow fleet. And this is a group of about 1,000 aging tankers, oil tankers that operate in the gray zone, you know, illegally servicing these oil producers. They started with Iranian oil. You know, Iran is about a 3 to 4 million barrel per day producer. And when they've been sanctioned for the last few decades, the shadow fleet basically started servicing them. And these are smaller tankers that that sail under false flags. They have the ownership is hidden and they basically skirt international law to basically buy oil at discounts and sell and bring it over to the people who are willing to buy oil on the cheap, mostly China and India. Well, that started in Iran. And then what happened is when Russia invaded Ukraine, they got sanctioned and the shadow fleet really went big time. And so a lot of vessels entered this very lucrative trade to trade, you know, gray market oil or black market oil. Let's call it black market oil. And then, and the shadow fleet has been operating pretty much without, without, without resistance. So no one has been trying to stop these vessels or hinder them from doing this, even though it's illegal what they're doing. Until Venezuela. And so what happened is when, uh, when Trump did the military action, the first thing he did to put pressure on Venezuela is start intercepting these tankers and start putting, uh, you know, uh, you know, all of a sudden if you're, you're a shadow fleet tanker, you're going, oh my God, am I going to get boarded? And am I going to lose all this oil that I just bought? And, uh, am I going to be, you know, insurable anymore, etc.? So they're wondering if they're going to make any money. And so what's happened is we're, you know, we're seeing one, these tankers are probably not going to be needed in Venezuela. But the bigger implication is there's indications now, I think the Europeans and the Americans are going to start policing the shadow fleet. And so what's happening is because of the Americans policing the shadow fleet in Venezuela, it's kind of trying to spotlight on the fact that we should be policing the shadow fleet. And now the world is going to be policing the shadow fleet. And so it's possible that to put pressure on Russia, which is a 10 million barrel per day producer, they're going to start intercepting the shadow fleet. And I believe that we're going to see this happening.
