FT: Trump weighs crippling sanctions on Russia’s oil "shadow fleet"

The Trump administration is considering imposing new sanctions on Russia’s "shadow fleet" of oil tankers if President Vladimir Putin does not agree to a ceasefire in Ukraine by August 8. The Financial Times writes that this move would mark the first US sanctions on Moscow since Trump took office in January.

The "shadow fleet" consists of older tankers with obscured ownership that Russia uses to circumvent Western restrictions on its oil exports. These exports have helped fund Russia’s war effort. Targeting the vessels themselves, rather than their owners, has recently proven effective, as buyers avoid ships on sanctions lists.

While the Biden administration previously sanctioned over 200 tankers, Trump had avoided new sanctions in hopes of negotiating peace. However, frustration with Putin’s refusal to halt fighting has led to an ultimatum: agree to a ceasefire or face tougher penalties.

The US move would complement recent EU sanctions, which have blacklisted over 400 ships. These restrictions support a G7 price cap of $60 per barrel on seaborne Russian oil, but the shadow fleet has allowed Russia to sell above this limit, mainly to China and India.

Data show that sanctioned tankers’ oil shipments dropped sharply after blacklisting, from 48 million barrels monthly before to 13 million after. Experts say intensifying pressure on the shadow fleet would significantly hinder Russia’s war financing.

Trump discussed new sanctions with Ukrainian President Volodymyr Zelenskyy and plans to increase tariffs on India, a major Russian oil buyer. His special envoy, Steve Witkoff, is set to visit Moscow this week; Trump’s next steps depend on the envoy’s report.

Additional options include stricter enforcement of current sanctions, joining the EU’s upcoming dynamic price cap, or imposing secondary sanctions on banks and refineries facilitating Russian oil trade. Bipartisan legislation proposing steep tariffs on Russian energy buyers has also gained traction, with Trump considering support.

The White House warns of “biting sanctions” if Russia refuses peace but has withheld specific details pending further developments.

By Tamilla Hasanova