The fading efficacy of US shadow fleet sanctions

In a recent post, we documented the substantial increase in the number of Russian shadow fleet oil tankers sanctioned by the EU and UK. Our previous research finds that U.S. sanctions have historically had substantially more impact on shadow fleet activity than EU or UK sanctions. One likely explanation is the threat of U.S. secondary sanctions, which expose anyone conducting business with a sanctioned entity to U.S. action. This likely helps explain why U.S. sanctions have been especially effective at disrupting shadow fleet activity.

For the threat of secondary sanctions to remain credible, however, the United States must actively enforce them when violations occur. This has not happened under the current administration, which we argue has deteriorated the efficacy of shadow fleet sanctions imposed by the Biden administration as the “fear factor” of U.S. sanctions fades. In this post, we track the degradation of U.S. sanctions on the activity of sanctioned vessels, especially since the start of the war with Iran when global oil supply was constrained, and discuss what needs to be done to reverse it.

Tracking the latest wave of shadow fleet sanctions

Since our last post on August 6, the UK announced additional sanctions on shadow fleet ships. Figure 1 below updates our tracking of ships sanctioned by the U.S., the EU, and the UK. Our updated count for ships sanctioned by the U.S. is 216 (black line), a number that has been unchanged since the final days of the Biden administration in January 2025. The latest count for ships sanctioned by the EU is 671 (blue line), following an additional wave of vessels sanctioned in July. The updated count for the UK stands at 627 (red line), reflecting six additional vessels sanctioned on August 6.

The EU and the UK have made great strides in shadow fleet sanctions and moved to drastically increase overlap between each other and with the U.S. Figure 2 updates our tracking of this effort, factoring in the additional ships sanctioned by the UK last month. The number of ships sanctioned only by the U.S. has fallen to 15 (blue bars), while the number of ships sanctioned both by the EU and UK has risen to 395 (pink bars) and the number of ships sanctioned by all three jurisdictions stands at 178 (purple bars). The additional six ships targeted by the UK last month don’t overlap with EU or U.S. sanctions, so they add to our tracking of UK-only sanctioned vessels (orange bars) and expand the total universe of sanctioned ships (black line) from 734 in July to 740 in August.

Fading sanctions efficacy

To examine whether the Trump administration’s apparent reluctance to pursue secondary sanctions may be harming sanctions efficacy, we use Bloomberg’s AHOY database to track daily oil tanker traffic out of Russian ports starting in January 2015. Of the 216 shadow fleet and other ships sanctioned by the U.S., 134 are present in our data during the period of our analysis. Since the vast majority of the 216 ships were targeted in the final days of the Biden administration on January 10, 2025, this allows us to track the fear factor implicit in U.S. sanctions and how well this fear factor has held up through today.

Figure 3 tracks monthly volumes of crude and refined product shipped out of Russia’s ports on vessels sanctioned by the U.S. August data go through the 27th and we gross them up to a monthly number. The blue bars reflect exports out of Russia’s Baltic ports, the orange bars are exports out of its ports in the Black Sea, and the red bars are shipments out of ports in the Pacific. The wave of ships targeted by the Biden administration in its final days was skewed toward ships operating in the Pacific, so this is where the impact on activity was greatest.

Monthly volumes of Russian oil exported on sanctioned tankers fell from an average of 35 million barrels per month in 2023 and 2024 to 7 million on average in 2025, a reduction of over 80%. This drastic fall in volumes is testament to the incredible impact of U.S. sanctions, which we attribute to the fear factor exerted by secondary sanctions as we’ve documented in past work. However, volumes on sanctioned vessels have accelerated in recent months, a sign that the fear factor of secondary sanctions is fading. This phenomenon is recent and most apparent in July 2026. Since our data for August 2026 are incomplete, it is too early to know whether this will persist.

Potential remedies by U.S. sanctioning authorities

Strengthening the joint sanctions effort by the U.S., EU, and UK demands two distinct actions by U.S. authorities. One, the U.S. must join its allies in continuing to sanction additional shadow fleet tankers, as Russia amasses additional tankers and employs increased use of unscrupulous shipping networks to sidestep Western sanctions and the G7 price cap. Specifically, this means that the U.S. should designate the 524 tankers sanctioned by the EU and UK, but not yet sanctioned by the U.S. Ideally, this would occur immediately by unilateral action through the U.S. Treasury’s Office of Foreign Assets Control (OFAC). If enacted, the proposed Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 would facilitate that process by reducing the evidentiary burden for OFAC to sanction a tanker already designated by the EU or UK.

Second, the administration must use more forcefully the threat of secondary sanctions for entities conducting business with a sanctioned tanker. This effort has precedent in the Trump administration, which has taken action against, for example, Chinese refineries for importing Iranian oil on sanctioned tankers. In that action, the U.S. Treasury sanctioned the Shandong Shengxing Chemical Co. for importing over $1 billion worth of Iranian oil and specified that the oil had been transported on three tankers—the Nyantara, Reston, and Brava Lake—that had recently been sanctioned by OFAC. Applying a similar treatment to Asian refineries and other facilitators of the Russian oil trade would likely dramatically strengthen the force of tanker-specific sanctions imposed by the U.S.