Shadow fleets of oil tankers are growing larger, paradoxically driven by heavier sanctions levied by Western nations on Russian and Iranian oil operations, Reuters reports, citing commodity outfit Trafigura’s chief economist Saad Rahim.

Shadow fleet pressure is constant: The US sanctioned 20 entities and 10 vessels for their alleged role in Iran’s crude and petrochemicals trade as recently as last month, and threatened further tariffs against Moscow to pressure Russia into agreeing to a ceasefire in Ukraine.

While this constant pressure has slowed shadow fleets’ growth rate, their absolute size is still bigger than it was before sanctions, with operators more efficiently replacing blacklisted vessels with new ones, Rahim is quoted as saying.

REMEMBER- Shadow fleet operators are kind of resourceful: Tactics to evade sanctions have been evolving, with players like Iran embracing smaller and more agile tankers — specifically Aframax and Suezmax vessels — to transport its crude to ports with shallow berths that are less known and largely not wary of the impact of US sanctions. Ship-to-ship transfers have also been used to skirt monitoring — driving an 86% m-o-m surge in Iranian oil exports to China last March, despite successive sanction waves on its trade operations at the time.

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