The marine insurance sector is navigating heightened regulatory pressures as insurers, shipowners, and flag states confront increased scrutiny over shadow fleets and sanctions enforcement, according to Miller.
With an estimated 90% of global tonnage insured by the International Group of P&I Clubs, due diligence on sanctions compliance has become a focal point for insurers and maritime authorities.
Shadow vessels, which seek to evade sanctions and operate outside regulated frameworks, are adopting increasingly sophisticated methods to obscure ownership and operational intent.
Miller reported that ship-to-ship (STS) oil transfers have risen, particularly in the Mediterranean and Black Sea, as part of efforts to disguise oil origins. Safe STS estimates that approximately 11,500 such transfers of clean and dirty oil products occur annually, with an increasing concentration in sanctioned regions.
The use of opaque ownership structures, including special-purpose companies financed through prepaid charter arrangements, has been one method identified in recent sanction evasion cases.
Miller noted that tracking these vessels remains complex, with improved satellite imagery, artificial intelligence, and AIS monitoring systems playing a growing role in detecting suspicious activity.
The insurance industry is not the only entity increasing oversight. According to Miller, flag states are also taking action, as seen in the Panama Maritime Authority's decision to deregister vessels engaged in illegal activities or sanction evasion.
Following the inclusion of seven Panamanian-flagged vessels on the US Office of Foreign Assets Control (OFAC) list, Panama has committed to canceling the registration of ships found to be in violation of international sanctions. In August, it began deregistering four LNG carriers linked to Russian interests, with additional vessels expected to follow.
The European Union has intensified its measures against the shadow fleet. In December 2024, the Council of the European Union adopted its 15th round of sanctions, targeting Russia’s oil trade and shadow tanker operations.
Bloomberg has reported that these new sanctions include restrictions on specialized tankers used in the Sakhalin Island projects, which may disrupt the transport of up to 1.5 million barrels of crude per day from Pacific and Arctic ports.
In November, the UK government also expanded its sanctions against Russia’s energy industry, blacklisting dozens of tankers responsible for moving the nation’s oil as well as two insurers involved in the trade.
According to Miller, the Biden administration also expanded US sanctions against Russia’s oil industry in early 2025, with OFAC sanctioning 161 tankers and multiple trading firms. Russian ship insurers and two ship-owning companies, which accounted for nearly 30% of Russia’s oil exports in the first 10 months of 2024, were also targeted.
As a result, Chinese and Indian refiners are reportedly seeking alternative fuel sources, with Bloomberg noting a recent increase in oil stranded off Chinese coasts as traders and shipping companies seek to avoid sanctions exposure.
Looking ahead, uncertainty remains regarding US policy direction. Treasury secretary nominee Scott Bessent has expressed support for tightening sanctions on the Russian oil industry, stating at a Senate hearing in January 2024 that he would advocate for stronger measures.
The effectiveness of enforcement will be a key factor in determining whether the latest sanctions compel Russia to sell oil at deep discounts, increasing the incentive for further evasion.
Miller said that European policy developments may also influence the market. The Council of the European Union, currently under Hungary’s presidency, has signaled an intent to expand sanctions.
Denmark, which will take over leadership of the council from Poland in mid-2025, has been vocal in its opposition to shadow fleet operations, citing risks posed by uninsured tankers transiting the Baltic Sea.
The marine insurance sector continues to monitor the evolving sanctions landscape, with the full impact of these measures often becoming apparent only after maritime casualties expose compliance failures.
What are your thoughts on this story? Please feel free to share your comments below.
