August 18, 2025: The Russian economy and war effort in Ukraine is financed by oil and other energy exports. Russia is operating under severe economic sanctions imposed to reduce that income and create economic conditions for Russia that make it difficult to impossible to continue their war in Ukraine.

The key to Russian oil exports is the use of foreign tankers to smuggle their petroleum and coal from Russia to overseas customers. Eighty percent of the of the oil for China goes by pipeline and cannot be disrupted. China accounts for nearly half of Russian petroleum and other energy exports. It’s the other half that is at risk because of a growing list of sanctions.

Current estimates are that nearly 900 tankers are smuggling sanctioned Russian petroleum to customers in China, India, the European Union/EU, Turkey and Myanmar. Most refined petroleum products go to Turkey, China, Brazil, Singapore and India. The rest goes to nine countries, in the Middle East, Africa and Taiwan. China has been buying 47 percent of the crude oil while India takes 37 percent followed by Turkey and the EU with six percent each. China, India and Turkey account for about 90 percent of Russian income from the sale of oil, natural gas and coal. The U.S. is imposing additional tariffs on countries that import Russian oil. India is already subject to these tariffs, which increases what they have to pay for imports from the United States. The Americans are negotiating with China and Turkey over what tariffs are being imposed to discourage Russian oil imports. Meanwhile, Russia has been bringing in up to $700 million a month from these exports.

The economic sanctions were imposed on Russia because of its 2022 invasion, in an effort to reduce its hard currency income from exports of oil and natural gas. These are the main Russian exports and the major source of income for the Russian government and war effort. To evade these sanctions, Russia created a growing shadow fleet of oil tankers purchased and/or leased abroad and obtained unrestricted access to a Chinese smuggler haven maintained in Hong Kong.

The nations enforcing the sanctions, particularly the United States, have tracked the routes of the Russian shadow fleet and noted the key role Hong Kong plays in arranging the movement of sanctioned Russian oil to its primary customers in China and India. Hong Kong is also a major source for supplying sanctioned nations with weapons and munitions. A current customer is Russia. Hong Kong does this by allowing Russian tankers and cargo ships, operating with fake credentials to disguise their Russian affiliation, to bring in Russian oil and other raw materials. The Russian ships then leave Hong Kong carrying weapons for their war in Ukraine.

Another major player in the Russian smuggling effort is North Korea. For years North Korea has been buying small, secondhand cargo and tanker ships and using them for smuggling. A favored evasion technique consists of taking on or transferring cargo at sea in its own territorial waters. The North Korean merchant fleet consists of about 150 ships, with most purchased from Chinese firms.

North Korea is a notorious and persistent maritime smuggler. Because of North Korean smuggling, the United States expanded its maritime smuggling and sanctions enforcement program in 2018 when a new multi-national enforcement organization was created. Initial members were the United States, Australia, Canada, New Zealand, Britain, France, South Korea, and Japan. The Enforcement Coordination Cell, or ECC, is enforcing the UN sanctions that curb North Korean smuggling related to items needed for their nuclear and ballistic missile programs. In addition, the ECC allowed member nations to also enforce whatever other sanctions or naval missions their government put a priority on. The U.S. has since invited India, Vietnam, Indonesia, and the Philippines to join and assist with monitoring growing Chinese violation of offshore water rights, especially in the South China Sea and other areas of the West Pacific.

The ECC concentrates on the 2,000-kilometer-long shipping lane from the Indian Ocean, through the Malacca Strait and the South China Sea to North Korea. Along this route there are not only North Korean flagged ships participating in smuggling, but even more Chinese, Taiwanese, Liberian, Sri Lankan, and ships that are independent and fly whatever flag they believe will keep them from getting seized for smuggling. Earlier U.S. efforts had already identified many North Korean and Iranian owned tankers and cargo ships that were often engaged in smuggling. This led Iran and North Korea to use their own ships less and willing foreign ships instead. These third-party ships are the ones the ECC sought to identify. These ships can be identified, along with their owners and the owners can have banking and other sanctions placed on them. Many nations, not part of the ECC, but economic partners with ECC members, will cooperate if a smuggler ship visits one of their ports. At that point the captain can be arrested and th

The ECC member warships do not depend on inspecting suspicious ships while at sea but confirming who is where and when. This is especially useful for spotting smugglers who often turn off their location beacons and continue in running dark mode. These location beacons transmit current ID and location to any nearby ships and often, via satellite, to their owner and international shipping organizations. The location data, past and current, can be found on several public websites. The beacons exist mainly as a safety measure for ships operating at night or in bad weather in heavily used shipping lanes. Smugglers have learned how to turn off their beacons near a port where, it is assumed, they have docked or anchored off the coast waiting for an available dock.

Some smugglers are using spoofing, a form of jamming that just modifies the beacon signal to present a false location. This is where warships and maritime aircraft come in as these can identify ships visually or using radar followed by visual inspection. This is more damaging to the smugglers because it provides more evidence that their ship was involved in smuggling and with enough evidence you can go after the ship owners and seize the ship whenever it enters coastal waters, within 22 kilometers of land belonging to a nation that will seize outlaw ships.