From Sanctions to the Scrapyard: Confronting a Growing Environmental Threat

12 Jan 2026 10:42 AM

Sanctions are blocking end-of-life vessels from being scrapped thus creating an environmental time bomb – but there is a simple fix.

The global sanctions landscape has driven the emergence of an extensive shadow fleet of tankers used to move sanctioned oil. Despite the spotlight on Russia’s use of the shadow fleet, the likes of Iran, North Korea and Venezuela abuse this methodology too. These fleets consist largely of very old vessels, typically far beyond the age at which reputable operators retire their tankers. Many are poorly maintained, operate with obsolete equipment and are either underinsured or, in a growing number of cases, not insured at all. In the normal course of business, they would have been scrapped long ago.

Shadow fleets often use opaque structures to conceal ownership and operational control, relying on flag states with weak due diligence standards, poor enforcement capacity, or no meaningful regulatory oversight. Others operate with no recognised flag at all with the rising practice of false flagging and fraudulent registration, where tankers claim the nationality of a state that has no record of them, thereby leaving them entirely outside the supervision that maritime governance relies on.

As sanctions on the shadow fleet expand, the incentives for secrecy grow and the intersection of old age, weak oversight, poor maintenance and minimal insurance exacerbates the risk of major environmental incidents.

Once a vessel becomes sanctioned, legitimate service providers withdraw. Banks refuse to clear payments, insurers cancel their cover, classification societies withdraw certification and port access becomes limited or unavailable. These factors make sanctioned vessels toxic assets that prevent even the possibility of scrapping those that are no longer seaworthy. This heightens the risk of owners simply abandoning sanctioned vessels at sea, a trend that raises the possibility of serious ecological harm.

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