How a burnt out, abandoned ship reveals the secrets of a shadow tanker network

The number of vessels transporting sanctioned oil is booming and the consequences can be felt across the world – from Iran, to China, to Ukraine.

Early in the afternoon of 1 May, Oleksandr Lepyoshkin entered his cabin to find it filled with smoke. Seconds later the glass exploded from his windows as the ship was rocked by several blasts and a huge fire began to overrun the vessel. He alerted the ship’s chief engineer who started the onboard fire pump. While he waited for word on whether they would need to abandon the ship, Lepyoshkin counted his crew members.

The explosion on board the oil tanker, known as the Pablo, had immediately attracted the attention of other vessels anchored at the busy entrypoint to the Malacca Straits. Sat upon the horizon several tankers and cargo ships began to issue reports of a ship on fire, as plumes of black smoke filled the sky around the stricken vessel.

At over 230 metres long and with the fire still raging, the Pablo was difficult to search, and when it became clear the blaze could not be controlled, life rafts were thrown from the top deck. With fears that a second explosion was building there was no time to lower the ladders, so the crew hurled themselves from the top of the deck into the water.

“In this situation, it’s like war. It’s explosions, smoke … and you’re feeling this smoke and losing your mind,” Lepyoshkin, the Pablo’s captain, later told the Malaysian authorities.

As the Malaysian maritime department began its rescue mission, plucking the ship’s crew from the water, the scale of the accident quickly became clear. A build up of gas inside the tanker’s empty hold had caused an explosion strong enough to rip off almost the entire top deck of the vessel, destroying its communication system in the process. Staircases that climbed several storeys up to the ship’s bridge had been blown away and hung limply into the sea.

Luckily, the tanker was empty, having made a delivery to China a few months earlier, but of the 28 crew on board, three were missing. It was hoped they would be found safe.

Now, more than four months after the incident, the wreckage of the Pablo still sits at anchor off the coast of Malaysia untouched.

However, despite the scale of the catastrophe, maritime experts are almost universally agreed that the incident was a lucky escape for a sector of the shipping industry that is increasingly living on borrowed time – and at risk of a much more deadly and environmentally destructive accident.

The Pablo was part of a growing fleet of shadow tankers, transporting sanctioned oil with little regard for industry regulations. Hidden behind shell companies, shadow vessels are characterised by their repeated change of flag carriers and owners – and crucially – often operate without insurance. When a ship is abandoned beyond repair, the insurer becomes its owner and takes responsibility for its scrapping. Without a listed insurer, the Pablo remains where it is.

Experts warn that such ships pose a serious threat to the environment, as well as the lives of those they come into contact with. But the shadow trade of ships like the Pablo is only growing in size and scale – taking journeys that thread their way through the world’s geopolitical hotspots; from the oilfields of Iran, to the factories of China, all the way to the frontline of Russia’s war against Ukraine.

Five years ago the Pablo was set to be sold as scrap. At 21 years old, it was well past the age at which most oil tankers would be retired due to wear and tear. Then known as Olympic Spirit II, its demolition was cancelled due to a sudden surge in demand for older – and cheaper – oil tankers.

In 2018 Donald Trump pulled the US out of the Obama-era Iran nuclear deal, which had seen Tehran curb its nuclear activities in return for the lifting of sanctions. As the US reimposed sanctions, Iran’s oil sales were throttled, with Washington threatening to sanction any company or country that purchased Iranian oil.

Iran has one of the largest oil reserves in the world and the export of that oil is vital to the country’s economy. With that trade under threat, a fleet of shadow vessels – willing to defy international sanctions – stepped in to ship millions of barrels of oil around the world, often selling it at a discount price.

Since then the shadow fleet has only grown bigger. In December 2022, the G7, the European Union and Australia agreed to a price cap on Russian oil in response to its invasion of Ukraine. Under the terms of the deal, insurers are prohibited from covering vessels which sell oil above the maximum price set by those western powers.

In their 2023 safety and shipping review, insurer Allianz noted that the growing list of sanctions against Russia mean that the number of shadow tankers could now number “more than 600, or roughly a fifth of the overall global crude oil tanker fleet”.

“Vessels are more likely to be older ships … with lower maintenance standards. Reports indicate there were at least eight groundings, collisions or near misses involving tankers carrying sanctioned oil products in 2022,” says Justus Heinrich, from Allianz Global Corporate & Specialty.

“The increase in the number of shadow tankers is a worrying development, threatening the world fleet and the environment.”

According to Claire Jungman, chief of staff for US watchdog group United Against Nuclear Iran (UANI), the Pablo was one such vessel that posed a threat.

“It was one of our repeat offenders. We have a list of 50 tankers that routinely shuttle Iranian oil and Pablo was one of them,” she says.

Jungman routinely tracks up to 300 sanction-busting tankers all around the world. Once a vessel is identified by her team they often inform flag carriers – the country that the tanker is sailing under – in the hope that they will withdraw their flag.

In June 2021, the Pablo was known as Adisa, and was sailing under the flag of Cameroon. After UANI informed the country of the ship’s activity, that flag was withdrawn. Just a few months later it was sailing under a new name – Helios – with a new flag – the Cook Islands. But after UANI provided evidence of sanctioned trades, that flag also was withdrawn.

By 2022 it was known as Mockingbird and registered to Tanzania, who also withdrew their flag after being contacted by UANI.

On 4 April, UANI contacted the Gabonese authorities who had now registered the ship under the name of the Pablo. While promising to continue to monitor the vessel, the country’s department of maritime affairs also said that it had carried out due diligence and had taken a letter of understanding from the ship’s owners that it would comply with all US, UN and EU sanctions.

However, the fact that the Pablo was sailing under the flag of Gabon, alarmed Jan Stockbruegger, a maritime security expert from Copenhagen University. “If you want to wait for Gabon to do something you’ll wait a long time. They are not known to be a flag state that takes responsibility for the vessels they’re flagging.”

“There is a reason that many ships are registered to [small countries],” says Stockbruegger. “Many of these small registries don’t have the capacity to make sure you comply with any standards. You pay no tax, just a registration fee and the flag doesn’t look at what the vessel is doing”.

Jungman says that the revolving list of names and flags that adorned the Pablo aren’t unusual. She says it’s this process of flag hopping that helped the vessel transfer an estimated 15.9m barrels, or over 1,000 Olympic sized swimming pools’ worth of Iranian oil since 2018.

Using satellite imagery and other datasets, UANI is able to estimate Iran’s monthly oil exports and track the vessels that move them. Despite the tough sanctions, the organisation calculates that thanks to the shadow fleet, Iranian monthly oil exports hit a five-year-high in August of this year.

In recent years, south-east Asia has emerged as a transport hub for this sanctioned oil. Tankers carrying oil from Iran, Russia or Venezuela will meet up with other vessels close to the region’s busy shipping lanes and perform ship-to-ship-transfers. The oil in the new vessel will then be rebadged as coming from a legitimate source and be sent off to be sold elsewhere.

Satellite imagery reveals that such transfers are happening multiple times a day, says Jungman.

The process itself is highly dangerous, says Stockbruegger. “There are specific regulations in how you do these transfers. In bad weather and with old equipment, it increases risk. If you have a tanker that’s 20 years old that risk only increases again.”

The crew often come from countries that aren’t rich, says Stockbruegger, and might be unaware that the ship is moving sanctioned oil. The Guardian has seen nothing to suggest the Pablo’s crew were aware that the vessels activities contravened sanctions and there is no suggestion of wrongdoing by the captain or crew.

But Stockbruegger stresses that the danger of ship-to-ship transfers is not just environmental, but economic as well.

“If there’s an oil spill in [the Malacca strait] … it would disrupt shipping traffic which would be very bad for the global economy.”

With the stakes so high, both Jungman and Stockbruegger question why governments aren’t doing more to stamp out the practice.

Malaysia’s Marine Department told the Guardian that authorities are “constantly tightening enforcement in the waters off the coast of Malaysia which includes curbing illegal activities like the illegal transfer of oil, anchoring without permission and others.”

However, the law of the sea guarantees freedom of navigation, says Stockbruegger even for sanctions busters. “The traffic in the Malacca straits is immense, it’s difficult to identify who are the sanction busters,” he adds.

As for the US, which might be expected to more closely enforce its own sanctions, Jungman says it’s not a priority for the current administration. “They’re looking to negotiate a new deal with Iran. They’re trying not to disrupt that potential negotiation process.”

As of now, the Pablo remains abandoned.

“Our satellite images shows that it’s basically just a burned ship sitting off the coast of Malaysia,” says Jungman.

Malaysia’s marine department has confirmed the owner and manager of the ship responded to its requests to deal with the vessel, but that the details of their correspondence are being kept confidential. A local salvage company has been appointed and the department is monitoring the Pablo “to ensure the safety of the ship and its voyage”.

But Jungman stresses that the case of the Pablo should serve as a rude awakening to industry insiders, governments and companies all around the world.

“I think there’s a lack of understanding that the revenue Iran accumulates from these oil sales is funding its nuclear program, or the jails that American hostages are held in – or even the Iranian drones being sent to Russia.”

Almost immediately after the explosion on 1 May, Malaysia’s maritime department commenced a nine-day rescue mission that eventually saw the Pablo boarded and searched. Despite the initial optimism, none of the three crew were ever found. They officially remain missing.

The Guardian attempted to contact the families of some of the missing crew, but were unsuccessful – however their likely final moments were recorded through social media updates and images posted online.

Twenty-five-year-old Satyam Tripathi, from Uttar Pradesh in India, spent the morning of 1 May posing for pictures on the Pablo’s bridge. As part of the deck crew, he was dressed proudly in his white seaman’s uniform, his long hair tucked under his sailor’s cap. Under heavy grey clouds he smiled at the camera with the long ship stretching out behind him, and then posted the image online for his followers.

Within hours he would be declared missing along with Indian national Dinesh Kumar Chauhan and Ukrainian Sabit Shenderovskyi.

Tripathi had worked across various cargo ships and tankers over several years, documenting his travels from the Middle East, to China and back to India. His posts serve as an index of a life of adventure cut short by an accident that many experts have warned is all too likely to happen again.

Source: The Guardian