Australia is undermining its own vessel sanctions by continuing to import
In the long effort to hold nations accountable for acts of war, sanctions have always carried a quiet vulnerability: the world's supply chains are older and more patient than any policy. Research now reveals that at least 25 Russian oil tankers sanctioned by Australia continue to feed its fuel supply through Indian and Chinese refineries — a reminder that economic pressure, however well-intentioned, can be quietly rerouted. The gap between a government's declared values and the practical flow of commerce is not new, but it is rarely this precisely mapped.
- Despite Australia sanctioning over 150 shadow fleet vessels, at least 25 of the first 60 remain embedded in supply chains serving Australian importers — the sanctions are holding the door while the oil walks through the window.
- Eighty-five percent of the oil carried by these sanctioned ships flows to India's Jamnagar refinery, which then exports refined products directly to Australia, turning a geopolitical firewall into a revolving door.
- At Senate Estimates, Foreign Minister Penny Wong acknowledged the failure but deflected responsibility toward the private sector, while BP offered compliance language that experts say does nothing to address the structural leak.
- Legal scholars and energy analysts warn that sanctioning individual vessels is an endless game of whack-a-mole — the real pressure point is the refineries themselves, not the ships that supply them.
- The Department of Foreign Affairs and Trade is 'evaluating options,' but the cautious bureaucratic tone signals no immediate move toward the bolder step of sanctioning foreign refineries buying Russian crude.
When the United States and European Union announced fresh sanctions against Russia's major oil companies, refineries across India and China began calculating the consequences — some of them supplying finished products to Australian importers. The question those calculations raised is one Australia has not yet answered: can any sanction regime actually stop the shadow fleet?
Exclusive data obtained by SBS suggests the answer, for now, is no. At least 25 vessels sanctioned by Australia in June remain active in the supply chains of Australian companies. These ships carry Russian crude under deliberately obscured ownership structures — flags of convenience, untraceable insurance, false identities — and they have found the gap in the price cap logic that a coalition including Australia imposed after Russia's 2022 invasion of Ukraine.
The numbers are stark. Eighty-five percent of the oil delivered by these sanctioned vessels flows to the Jamnagar refinery in India, which then exports refined products back to Australia. Australian companies are, in effect, importing processed Russian crude through a refinery that openly disregards the vessel sanctions Australia itself imposed.
The issue reached Senate Estimates earlier this month, where Foreign Minister Penny Wong acknowledged the problem while pointing toward the private sector's responsibility to police its own supply chains. BP, singled out for scrutiny, responded with a statement about maintaining compliance processes — language that experts say does not address the structural failure. The Department of Foreign Affairs and Trade offered only that it is evaluating options to increase pressure on Russia's oil revenues.
Dr Anton Moiseienko of the Australian National University calls the current approach whack-a-mole: sanction one vessel, another appears. The more effective path, he and other analysts argue, is to sanction the refineries themselves — the Indian and Chinese facilities that knowingly purchase Russian crude and resell it onward. That would close the loophole rather than endlessly chase ships. Whether Australia's government will take that step remains an open question, but the data makes clear the current strategy is not achieving what it was designed to do.
When the United States and European Union announced fresh sanctions against Russia's largest oil companies this week, refineries across China and India began calculating the fallout. Some of those refineries sell their finished products to Australian importers. But a question lingers: can any sanction regime actually stop Russia's shadow fleet—the deliberately obscured tankers that slip through the cracks of international pressure?
Exclusive data obtained by SBS reveals an uncomfortable answer. At least 25 vessels that Australia's government sanctioned in June remain active in the supply chains of Australian companies. These are ships that transport Russian crude oil under murky ownership structures, using flags of convenience and insurance arrangements designed to obscure their true operators. More than 150 such vessels from Russia's shadow fleet have been sanctioned by Australia in total. Yet the system designed to punish Moscow keeps leaking.
Vaibhav Raghunandan, an EU-Russia analyst at the Centre for Research on Energy and Clean Air in Finland, describes the shadow fleet as vessels operating outside the price cap mechanism—ships with deliberately opaque ownership, untraceable insurance, and false flags. After Russia's 2022 invasion of Ukraine, a coalition including Australia imposed a price cap on Russian crude oil, aiming to starve the Kremlin of revenue while keeping global oil supplies stable. The logic was elegant: limit what Moscow could earn per barrel without cutting off the world's oil. But the shadow fleet found the gap in that logic and drove through it.
The Centre for Research on Energy and Clean Air uses maritime traffic data, shipping records, customs information, and market intelligence to track where Russian oil actually goes. What they found is stark: 85 percent of the oil delivered by these sanctioned vessels flows to the Jamnagar refinery in India. That refinery then exports refined products back to Australia. In other words, Australian companies are importing Russian crude oil that has been processed through a refinery that openly disregards the vessel sanctions Australia imposed. The government is, in effect, undermining its own measures.
The issue surfaced at Senate Estimates earlier this month. Foreign Minister Penny Wong acknowledged the problem but suggested the private sector bears responsibility for policing its own supply chains. She noted that governments face real limits when traceability mechanisms don't exist. One company, BP, was singled out for scrutiny. A senator expressed hope the company would reduce any revenue flowing to Vladimir Putin, including through secondary products. BP responded to SBS News by stating it maintains processes and controls to comply with applicable trade sanctions—a statement that does little to address the structural problem.
The Department of Foreign Affairs and Trade said it does not comment on potential future sanctions but is evaluating options to increase pressure on Russia's oil revenues. That cautious language masks a deeper challenge: the current approach treats symptoms, not causes. Dr Anton Moiseienko, a senior lecturer in law at the Australian National University, argues Australia is playing whack-a-mole. Each time a vessel is sanctioned, another appears. The real solution, he suggests, is to sanction the refineries themselves—the Indian and Chinese facilities that knowingly buy Russian crude wholesale and resell it to countries like Australia. That would close the loophole rather than endlessly chase individual ships. Whether Australia's government will take that step remains unclear, but the data suggests the current strategy is failing to achieve what it was designed to do.
Citações Notáveis
The way that we define a shadow fleet is any vessel that does not have to comply with the price cap... that have essentially opaque ownership structures, non-determinable insurance, utilise flags... that are often false.— Vaibhav Raghunandan, EU-Russia analyst, Centre for Research on Energy and Clean Air
The real step that Australia could take is not to keep playing that whack-a-mole game, but to sanction the refineries that are buying wholesale Russian crude oil and reselling it to places like Australia.— Dr Anton Moiseienko, senior lecturer in law, Australian National University
A Conversa do Hearth Outra perspectiva sobre a história
So these shadow fleet vessels are sanctioned by Australia, but they're still moving oil. How does that even work?
The sanctions target the ships themselves, but the oil they carry gets refined in India or China first. Once it's refined, it's a different product—harder to trace back to its Russian origin. Australian companies then buy the refined fuel, not the crude.
But doesn't Australia know where the refined oil comes from?
In theory, yes. In practice, the supply chains are deliberately obscured. The refinery in Jamnagar processes 85 percent of this shadow fleet oil. It's not hidden, but the connection between the sanctioned vessel and the final product sold to Australian companies is murky enough that enforcement becomes nearly impossible.
Why doesn't Australia just sanction the refineries?
That's what experts are asking. It would be more direct—cut off the buyer, not the shipper. But it's also more confrontational. India and China are major trading partners. Sanctioning their refineries would be a much bigger move politically.
So the government is choosing not to because it's hard?
Not quite. They're saying they lack the mechanisms to trace it reliably. But that's partly because they haven't built those mechanisms. The real barrier is political will and the cost of escalation.