Following Saturday’s unsuccessful peace talks between the United States and Iran in Islamabad, Donald Trump made the shocking announcement of an imminent blockade on the Strait of Hormuz, the shipping lane for over 20% of the world’s oil supply. This decision has left many confused, given that Iran has already bottlenecked the waterway. However, Tehran has continued to profit by leveraging its established connections within a heavily sanctioned shipping network that has allowed nations such as Iran and Russia to maintain their export profits in the face of Western sanctions, drawing the ire of the United States and the European Union.
Following Iran’s initial interdiction effort, crossings of the critical passage dropped by 95%, delivering a blow to energy markets worldwide. What was likely anticipated by experts but probably not by the general public, however, was the persistence of what maritime intelligence firms refer to as “the shadow fleet,” a network of tankers that engage in deceptive shipping practices to transport goods out of heavily sanctioned nations. In the first three weeks of March, 59% of the 91 oil tankers that crossed the strait were identified as sanctioned. These ships have almost exclusively exported Iranian oil through the strait, contributing to the roughly 1.5 million barrels a day Iran still exports, maintaining its pre-war averages and providing Tehran with $140 million in daily revenue per The Financial Times.
Before entering the strait, these ships “go dark” by disabling their transponders or spoofing their locations. These measures allow them to clandestinely collect Iranian oil. Once exiting the strait, most of these ships turn east towards China, which has long been their preferred customer, and, more recently, towards India. A significant number of these pickups occur on Kharg Island, Iran’s key export terminal located deep within the Persian Gulf about 20 miles off Iran’s coast. The island was recently subjected to numerous American airstrikes. However, no oil infrastructure has been targeted to date. Whether or not coordinated strikes on energy facilities at Kharg will be included in Trump’s blockade remains to be seen.
The shadow fleet, which now numbers at 1,400+ vessels according to Lloyd’s List, one of the world’s oldest shipping journals, has long been a thorn in the side of the U.S. and its allies. In addition to serving Iran, these fleets have also transported heavily sanctioned Venezuelan and Russian oil. In fact, the number of these ships engaging in deceptive practices saw its biggest spike following the sanctions imposed on Russia in 2022, presenting an opportunity for shady ship owners, possibly state-sponsored, to capitalize on inflated freight rates and discounted oil prices.
The ships most often used for these dangerous deliveries are extremely old, making it easier for them to dodge regulations and hide changes in ownership. Their cheap and expendable nature further favors their use in high-risk endeavors. Many ships purchase non-Western insurance or go without coverage, making them even harder to track through conventional means. The crews on these ships also routinely engage in deceptive practices such as disabling their transponders, spoofing, performing ship-to-ship transfers, falsifying documents, swapping flags, and renaming their ships. Some tankers have even been seen repainting their exteriors while at sea to alter their identity mid-voyage.
Thanks to the ever-watchful eye of satellite and ship-tracking technology, maritime researchers have been able to track thousands of these ships, focusing on illicit behavior and identifying hotspots for ship-to-ship transfers, most notably at the Riau Archipelago near Singapore. However, terminating these tankers has proven far more difficult than identifying them. Western navies and coast guards have struggled to act in accordance with the myriad of maritime laws put in place to protect freedom of navigation. Recently, Great Britain reneged on Sir Keir Starmer’s threat to “go after” Russian tankers crossing the English Channel out of fear of breaching international law.
The U.S. seems to have fewer qualms about skirting maritime law; the last serious action taken against shadow fleet vessels, Operation Southern Spear, occurred during the blockade of Venezuela in late 2025. The U.S. seized ten sanctioned oil tankers, mostly in the Caribbean, on accusations of deceptive practices, including flying false flags and deactivating their transponders. It seems that the President and his advisors are hoping to constrain Iran’s energy export flow in a similar fashion. If this is indeed the objective, do not expect the United Nations’ regulators to exert any meaningful influence. They were routinely ignored during Southern Spear, with seizures continuing following their formal condemnation of the American Navy.
While the shadow fleet has succeeded against powers hesitant to violate international law, its chances of running through a full U.S. blockade are next to impossible. This means that Iran will likely lose a major source of income over the coming days. Other avenues for exporting oil still exist, notably via the Caspian Sea or overland smuggling routes along the border with Pakistan. However, replicating the sheer volume of exports that traveled through the Strait of Hormuz would be inconceivable. Whether this new squeeze will bring Iran back to the negotiating table in a mood more conducive to accepting American and Israeli demands remains to be seen.