Panama to deregister 128 vessels linked to Russia and Iran’s “shadow fleet” of oil tankers

Panama will revoke the registration of 128 vessels that sail under its flag after they were targeted by sanctions from the United States, its allies, or the United Nations. The ships in question are suspected of taking part in the “shadow fleet,” which transports Russian and Iranian oil in an effort to evade international sanctions. Panama’s decision was confirmed by Ramón Franco, Director General of the Merchant Marine at Panama’s Maritime Authority, in a statement to Bloomberg.

According to Franco, at least 70 tankers have already been removed from the registry. He acknowledged that the decision will cost Panama up to $2 million in lost revenue.

“We are 100 years old and counting. We definitely are not going to be left behind in the face of current challenges of the industry and, of course, sanctions are one of them,” Franco said.

Merchant ships frequently operate under the flags of countries not directly tied to the ship’s owners. These so-called “flag states” play a critical role in maintaining industry safety standards, inspecting and certifying vessels and their crews. Panama is one of the largest flag registries in the world, with more than 8,000 ships flying under its authority.

The tightening of sanctions on the oil and energy sectors of Russia and Iran has brought increased scrutiny on the operations of the “shadow fleet” — composed at least in part of old, poorly maintained, and often uninsured vessels, that are used to transport sanctioned cargo all around the world. In Russia’s case, that cargo is oil sold above the $60-per-barrel price cap set in December 2022 by the G7 countries, the EU, and Australia.

Panama’s move to deregister 128 vessels comes after regulatory changes introduced last October streamlined the delisting process. According to Franco, what once took five to six months can now be completed in as little as one week to a month.

A joint investigation published by Danwatch and NRK earlier this week revealed that Norwegian company Ro Marine issued fake insurance certificates for 76 tankers in Russia’s shadow fleet. The company, which is owned by a Russian national, does not publish operational reports, has no employees aside from a single Bulgarian board member, and does not appear to have conducted any financial transactions.