The European Union is preparing a new round of sanctions aimed at curbing Russia’s "shadow fleet," which transports illicit oil and serves as a crucial revenue stream for the Kremlin’s war in Ukraine. However, it remains unclear whether the Trump administration will align with the EU in targeting these vessels.
Russia’s shadow fleet emerged to circumvent Western sanctions on its oil exports, enabling Moscow to ship crude to buyers in India and China by registering ships under flags of convenience in countries like Gabon. In the final days of the Biden administration, the U.S. Treasury sanctioned 183 vessels linked to this illicit trade.
So far, the Trump administration has not rolled back these sanctions and is considering expanding the blacklist to include dozens more ships, according to sources familiar with the discussions. However, no final decision has been made, and officials are still assessing various sanction strategies. The White House declined to comment.
The EU's latest sanctions package would nearly double the number of third-country vessels banned for transporting Russian oil, according to diplomats briefed on the matter. Final approval is pending, with officials set to meet Wednesday to reach an agreement. Unlike the Biden administration, which typically worked in tandem with the EU on sanctions, the U.S. has yet to signal whether it will join this latest effort.
In an interview with The Wall Street Journal last week, Vice President JD Vance stated that the U.S. could use economic or military “tools of leverage” to pressure Russia into a peace deal with Ukraine, though he did not specify what those tools would entail.
Daniel Fried, a former U.S. diplomat who oversaw sanctions policy against Russia during the Obama administration, argued that cracking down on the shadow fleet would be a “relatively low-risk” way to strengthen existing sanctions imposed by Biden. "It needs to be enforced," Fried said, noting that only a fraction of the vessels involved in illicit trade have been sanctioned. "The Europeans would support it. It would also send a message that Trump isn’t going to cave to Putin or be his patsy."
EU officials are finalizing a plan to blacklist over 70 additional vessels, with an official decision expected when foreign ministers meet on February 24—the third anniversary of Russia’s full-scale invasion of Ukraine. As of mid-December, the EU had already banned 79 ships from entering its ports and restricted their access to European shipping services.
Enforcing these sanctions has been challenging due to the deceptive practices employed by the shadow fleet. These vessels obscure their operations by using flags of convenience, registering ownership in tax havens, switching off radio signals to avoid tracking, and transferring cargo between ships. Estimates suggest the fleet comprises anywhere from 400 to 1,400 ships, making an exact count nearly impossible.
While Trump has spoken aggressively about pressuring Putin into a peace deal, some former advisers doubt he will take serious action. Last week, Trump revealed that he had a "lengthy and highly productive phone call" with Putin—the first publicly disclosed conversation between the two leaders since Inauguration Day. Following the call, Trump announced that negotiations to end the war in Ukraine would begin soon.
He also introduced a U.S. negotiating team consisting of Secretary of State Marco Rubio, CIA Director John Ratcliffe, National Security Adviser Michael Waltz, and Middle East Special Envoy Steve Witkoff. While details of their peace plan remain unclear, the administration appears to be laying the groundwork for a diplomatic effort.
Retired Lt. Gen. Keith Kellogg, Trump’s designated Ukraine envoy, recently met with European leaders at a security conference in Munich. Meanwhile, Russia has continued to invest heavily in its shadow fleet, spending an estimated $10 billion since 2022. According to the Kyiv School of Economics, more than 70% of Russia’s seaborne oil exports rely on these vessels.
The Biden administration imposed sweeping sanctions on Russia following the invasion but initially avoided directly targeting Russian oil exports to prevent a global spike in petroleum prices. Some analysts believe signs of an oil surplus could now give the Trump administration room to act. Oil and gas revenue has accounted for more than a third of Russia’s federal budget in recent years.
During Biden’s presidency, the EU closely coordinated with the U.S. and other G7 nations, including the U.K., on vessel sanctions. However, some European officials had been frustrated with Biden’s reluctance to crack down harder on the shadow fleet due to concerns about rising oil prices ahead of the November election.
Since Trump’s return to office on January 20, discussions between the U.S. and EU over sanctions have been limited, European officials say. Trump, who has criticized the billions spent on military aid to Ukraine, has expressed a preference for using economic leverage to end the war. He has grown increasingly impatient with Putin, who has signaled a willingness to negotiate but has shown little commitment to ending hostilities.
Just days after taking office last month, Trump warned Putin via Truth Social that he would impose sanctions if Russia did not move toward ending the war. "We can do this the easy way, or the hard way," he wrote.
Some within Trump’s camp, including Kellogg, have floated the idea of driving oil prices down to $45 per barrel as a means of pressuring the Kremlin into a settlement. Trump himself has sought to lower oil prices by pressuring Saudi Arabia, which has spare production capacity, to increase output.
However, experts doubt the U.S. could engineer such a steep price drop without Saudi cooperation, which appears unlikely. Any attempt to slash oil prices could also carry significant risks, potentially destabilizing energy-dependent economies in the Middle East and Africa while discouraging investment in U.S. domestic energy production.
The Kremlin is closely watching U.S. policy moves. Russia's heavy reliance on oil-export revenue has long been considered a strategic vulnerability. The Soviet Union’s financial collapse in the 1980s was partly driven by a plunge in oil prices, while Putin’s rise to power in the early 2000s coincided with an oil-price recovery.
Despite successfully mitigating some early economic sanctions by pivoting trade to India and China and imposing strict financial controls, Russia is now facing growing economic pressure. Inflation is rising, and labor shortages—exacerbated by wartime demands—are worsening. Economists warn that a decline in living standards could significantly impact ordinary Russians this year or next.
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