The Laundromat: How Russian Oil Keeps Flowing Three Years After Sanctions

The Marquise is a 184-metre product tanker built two decades ago. It is not a glamorous vessel. It is old, it is slow by modern standards, and it has spent the past several years doing something unremarkable on paper: picking up cargoes of petroleum products at Russian export terminals and delivering them to ports scattered across Turkey and West Africa.

What makes the Marquise interesting is not what it carries. It is who is behind it.

Follow the ownership chain, and you end up, quickly, in Dubai. The registered owner is a company called Sea Cheetah Holding. Operational control runs through two shipping managers — Lidoil DMCC and Spikoil DMCC — both embedded in the emirate's sprawling free-zone commodities district. The vessel has sailed under at least five different flags — Liberia, Marshall Islands, Gabon, Barbados, and Cameroon. Its tracking signal has gone dark near the Kerch Strait and near ports in occupied Crimea. By late 2025, it had been sanctioned by the United Kingdom, the European Union and Switzerland.

It is still sailing.

The Marquise is one thread in a much larger web. Pull on it and the whole structure becomes visible: Russian producers, Dubai trading houses, layers of shipping companies, refineries spread across Asia, Africa and the Mediterranean. Understanding how that structure works — and why it has proved so difficult to dismantle — is the point of this piece.

The Idea Behind the Sanctions

When Western governments moved to punish Russia after the February 2022 invasion of Ukraine, the logic was straightforward. Oil and gas revenues fund the Russian state. Cut those revenues, and you constrain the war.

The G7 and the European Union banned most Russian crude and refined fuel imports into Europe and paired the ban with a price cap: any Russian oil cargo moving on Western-flagged ships or insured through Western brokers could not be priced above sixty dollars per barrel. Above that threshold, Western companies were forbidden from providing services. The mechanism was meant to let Russian oil keep flowing to developing markets — preventing a global supply shock — while squeezing Moscow's income.

It was, in principle, a clever piece of economic design.

The problem is that oil does not move the way policymakers draw diagrams.

A single cargo extracted in western Siberia might pass through four or five commercial hands before it reaches a refinery. It might be loaded onto one tanker, pumped across to another in open water, mixed with oil from a different country, and sold twice more before anyone refines it into diesel. By that point, the paperwork describing that cargo — its origin, ownership, insurer, destination — may bear almost no resemblance to where the barrel actually came from.

Sanctions are designed to target Russian-origin oil. But origin, in a market built on blending, trading and refining, is a legal concept as much as a physical one. Once Russian crude is processed into diesel at a refinery in India, the fuel is no longer Russian by any definition that customs authorities recognise. Once it has been blended with Kazakh or Azerbaijani crude at a storage terminal in Fujairah, tracing the Russian share in the resulting mixture becomes practically impossible.

What emerged after 2022 was not a smuggling operation in any dramatic sense. What emerged was something more industrial: a network of trading companies, tanker operators and refineries that collectively move Russian oil through a series of legal transformations until it re-enters the market as something else. Analysts have taken to calling it a laundromat. The function is the same as the name implies. Russian oil goes in. Something else comes out.

The Fleet Nobody Talks About

On the morning of January 14, 2024, two tankers met in the Laconian Gulf, roughly seven kilometres off the Greek coast. One had spent the previous weeks loading crude at Ust-Luga, a Russian export terminal on the Gulf of Finland. The other was waiting. For nearly two days, the vessels sat alongside each other in international waters, far enough from shore to avoid port authority scrutiny, close enough for hoses. Then one sailed on.

This is the mechanical heart of the Russian oil trade since 2022. Not smuggling in any cinematic sense — no boats running dark through fog with falsified papers — but a steady choreography of transfers, flag changes and vanishing signals that make Russian crude extremely difficult to follow from wellhead to refinery.

The network enabling these movements has a name. Analysts call it the shadow fleet: a loose collection of several hundred ageing tankers acquired through shell companies after Western sanctions tightened, insured outside traditional markets, and managed through ownership structures deliberately designed to resist scrutiny. Energy analytics firms estimate that between 500 and 700 vessels now operate in this system, representing a substantial share of the tanker capacity moving sanctioned cargoes globally.

Most of these ships are old. The majority were built more than fifteen or twenty years ago. They sail under flags of convenience — Panama, Liberia, the Marshall Islands — and their ownership chains, when investigators try to trace them, tend to dissolve into layers of holding companies across multiple continents before the trail goes cold.

The most basic evasion tool available to a shadow fleet operator is also the simplest. Every large vessel is required under international maritime law to broadcast its position continuously through the Automatic Identification System — the transponder that allows ports, coastguards and other ships to track traffic at sea. Switching it off takes seconds.
Shadow fleet operators do this routinely. More sophisticated ones go further, broadcasting false position data. Maritime researchers have documented fabricated navigation tracks and movement patterns that are physically impossible — a ship appearing to travel at speeds no tanker can reach, or logging land positions.

A tanker that attracts sanctions attention has two other immediate options: change its flag or change its name. Flag-hopping — moving a vessel's registration between different national registries — has been standard practice for years. The major open registries in Panama, Liberia and the Marshall Islands offer registration to virtually any owner, with varying degrees of enforcement rigour. Name changes work for a simpler reason: many compliance systems still screen for sanctioned ships by name rather than by the permanent IMO identification number attached to every vessel. Change the name, and you delay detection, sometimes by months. The IMO number stays the same. The name does not. For compliance officers working at speed through long shipping manifests, that gap is enough.

The Traders in the Middle

The oil has changed ships. The tracking signal is back on. The cargo is moving south through the Mediterranean under documentation that describes it as something other than what it was when it left Russia.

Now it needs a buyer.

Before the invasion of Ukraine, Russia's crude and petroleum products were marketed through a small number of large commodity houses operating out of Geneva, London and Singapore. When Western sanctions tightened in 2022, those firms stepped back.
The trade did not stop. It relocated.

Into the gap moved a new generation of intermediaries, most of them established in the Dubai Multi Commodities Centre — a free-zone trading hub that has become, since 2022, one of the central nodes in the global market for Russian oil. The DMCC offers low taxes, lighter regulation relative to European financial centres, and access to the logistics infrastructure of a major port. It also sits outside the sanctions regimes imposed by the European Union, the United Kingdom and the United States.

Two companies appear repeatedly in shipping intelligence and trade records covering Russian petroleum product flows since 2022: Forteza Trading DMCC and Patera Middle East DMCC.

According to industry reporting and trade data, the two firms play complementary roles. Patera typically handles the commercial architecture of a transaction — negotiating with Russian suppliers, structuring the sale, arranging financing, and identifying downstream buyers at refineries in Turkey, India or elsewhere. Forteza handles the logistics: chartering vessels, coordinating cargo schedules, and managing the physical movement of the shipment from loading terminal to delivery port.

In practice, that means a single cargo of Russian naphtha or fuel oil might originate at the Baltic export hub of Ust-Luga, travel on a tanker chartered by one Dubai firm under commercial terms arranged by another, and arrive at a refinery whose procurement team dealt with neither the Russian producer nor the ship operator directly. The refinery was bought from a DMCC-registered intermediary. The intermediary bought from Russia.
The gap between those two transactions is where the commercial identity of the cargo changes.

Also operating within this network is Lidoil DMCC, a Dubai-based entity described in industry reporting as participating in trading, chartering and vessel management for tankers transporting Russian petroleum products. Lidoil manages eleven vessels in total, with four Aframax and Handysize tankers in its own fleet and a further portfolio under commercial management. Its main loading ports are Primorsk, Ust-Luga, Novorossiysk, Taman and Nakhodka — the spine of Russia's seaborne oil export infrastructure. The Marquise, the product tanker that opened this piece, has been linked to shipping networks associated with Lidoil.

The people running these firms are not outsiders to the industry. In February 2026, Euro Asia News reported on the personnel behind both companies: "Two companies are at the centre of these flows: Patera Middle East DMCC and Forteza Trading DMCC. Both firms employ former high-profile traders and executives from Trafigura, Vitol, and Lukoil's now-liquidated trading arm, Litasco Middle East Trading."

The report identified Dmitry Golubev, a former Trafigura trader and son of a sanctioned Russian regional governor, among those associated with Patera, alongside Ravil Kudyakov, a former TNK-BP executive. Forteza, meanwhile, is linked to Dmitry Vinogradov, described as a former Vitol trader with close ties to the company post-departure. The report also identified a number of former Litasco traders who have migrated into one or both firms. These are not people who stumbled into Russian oil trading by accident. They spent careers building the relationships — with Russian producers, with Asian refineries, with the shipping and logistics networks that move crude across oceans — that the new Dubai-based operation now depends on.

Euro Asia News was direct about the significance: "the concentration of former Western trading house personnel, politically connected individuals, and sanctioned-entity exposure underscores the challenges EU, UK, and US authorities face in enforcing energy sanctions."

How Oil Loses Its Nationality

The trading layer does not change the oil. What it changes is the oil's commercial biography — the chain of contracts, invoices and ownership records that determine, in the eyes of regulators and customs authorities, where a cargo came from and who is responsible for it.
The final transformation, though, happens on land. Inside refineries.
There is a principle embedded in international trade law that the oil industry has quietly turned into one of the most effective sanctions-evasion tools in modern history. It is called substantial transformation. The logic is straightforward: when a raw material is processed into a new product in another country, the finished product takes the nationality of the country where the processing occurred.

For crude oil, the consequences are decisive.

Russian crude shipped directly into a European port falls under the import bans the EU imposed after the invasion. But Russian crude shipped to a refinery in India, converted into diesel, and loaded onto a tanker bound for Rotterdam is not, by any legal definition that European customs authorities apply, Russian. It is Indian. The molecules are identical to those left Primorsk weeks earlier. The nationality is not.

Since 2022, India has become one of the largest buyers of Russian crude in the world. Before the war, Russian oil represented less than two per cent of India's imports. By 2023, it had become one of the country's primary sources of supply, drawn in by discounts that at times reached thirty dollars per barrel below international benchmark prices. Reliance Industries, operating one of the largest refining complexes on the planet at Jamnagar in Gujarat, substantially increased its intake of Russian grades. So did Nayara Energy — in which the Russian producer Rosneft holds a significant stake — at its Vadinar facility.

From Indian ports, tankers carry those refined products across the globe. Some go to Asia and Africa. Others head west. Diesel refined in India regularly arrives at terminals in the Netherlands, France and Italy, where it enters the European distribution system. The documentation is clean. The declared origin is India. The transaction is legal.
Chemically, some portion of that diesel was crude oil extracted in western Siberia weeks earlier.

Analysts call it the diesel boomerang. The name captures something the official import statistics do not.

Refinery transformation is the most complete way Russian oil sheds its identity, but it is not the only one. Blending achieves something similar with less infrastructure. When Russian crude is mixed with oil from Kazakhstan, Azerbaijan or the Middle East, the resulting blend is marketed as a new commercial grade. It has a new name, a new set of specifications, a new price. The cargo manifests describe the mixture, not its components. By the time a blended cargo is loaded onto a vessel for its final journey, the question of which barrels were Russian has become a matter of chemistry rather than paperwork — and nobody at the destination port is running that test.

The same logic applies to the paper trail itself. International oil shipments move on a chain of commercial documents — bills of lading, certificates of origin, cargo manifests — and regulators typically assess sanctions compliance by examining those documents rather than testing the fuel. If a certificate states that a cargo of diesel was produced in Turkey, that declaration is, in most jurisdictions, the legally operative fact. The burden falls on authorities to disprove it, not on the shipper to prove it.

What the Fuel Actually Does: A Product-by-Product Guide

The transformation story looks different depending on which product you follow. Crude oil, diesel, gasoline and sulfur each travel through the system in their own way, shed their Russian identity through different mechanisms, and serve different purposes at the other end. The molecule changes. The logic does not.

Crude: The Long Way Round

In early 2024, a cargo of Sokol crude was loaded at the De-Kastri terminal on Russia's Pacific coast. The oil was left aboard an Aframax tanker called the Viktor Titov and headed south toward the Sea of Japan. It did not sail directly to a refinery.

Maritime tracking data indicates the cargo was transferred at sea to another vessel — a handover of the kind that allows operators to move oil onto tankers with different ownership structures before continuing the journey. From there, a further transfer occurred near offshore anchorages in Southeast Asia, frequently used for exactly this kind of logistics. The final leg carried the crude to India.

A different pattern has developed in the Mediterranean. Tankers loading at Black Sea terminals such as Novorossiysk travel west through the Bosporus and into open water south of Greece, near Kalamata, where they meet very large crude carriers capable of holding roughly two million barrels. The smaller vessel pumps its cargo across. The VLCC continues through the Suez Canal toward refineries in India or China. The operation consolidates smaller Russian cargoes into large-scale Asian shipments while adding another step to the chain of custody that investigators must reconstruct.

The point of all this movement is not distance — it is documentation. Each transfer creates a new set of papers. Each set of papers puts more commercial daylight between the barrel and its origin.

Diesel: The Boomerang in Detail

Before 2022, Europe imported large volumes of diesel directly from Russian refineries. When the EU banned Russian petroleum products in February 2023, that direct trade largely disappeared from official import statistics. The underlying demand did not.

One documented example of how the new supply chain functions involves the tanker Furia, which loaded hundreds of thousands of barrels of Russian crude at Primorsk on the Baltic coast before sailing through the Mediterranean and the Suez Canal toward India. Its destination was the port of Sikka, a major entry point for crude feeding India's refinery network.

At facilities such as the Jamnagar complex and the Vadinar refinery run by Nayara Energy, the crude is broken down and reassembled into diesel, gasoline and jet fuel. The transformation inside the refinery is not just chemical. It is legal. Under the substantial transformation principle, once crude is refined outside Russia, the resulting fuels are no longer Russian in origin. They are products of the country where the refinery is located.
From Indian ports, those diesel cargoes are loaded onto product tankers and shipped to buyers around the world. Some go to Africa or the Middle East. Others travel west, toward the Mediterranean and the trading hubs of northern Europe. The crude that left Primorsk weeks earlier has become, on every customs declaration it will ever encounter, Indian diesel.

Europe's appetite for that diesel is not incidental. Before 2022, Russia supplied roughly half the continent's diesel imports. European refineries were not built to replace that volume quickly, and the structural gap in the market was real. What filled it was diesel from India and Turkey — countries that had been buying record volumes of discounted Russian crude and whose refineries were producing correspondingly large volumes of product for export. European buyers were not, in most cases, deliberately circumventing anything. They were buying from the cheapest available source. That the cheapest available source was processing Russian crude was not, under the relevant legal definitions, their responsibility to investigate.

Gasoline: Blended Out of Existence

Gasoline moves through a different part of the system. Its transformation is less about refining than about mixing.

Modern gasoline is rarely a single refinery product. It is assembled inside storage terminals by blending multiple fuel components — blendstocks — sourced from different refineries and different origins. Singapore is one of the largest centres for this activity, hosting storage terminals that hold components from dozens of facilities simultaneously. Fujairah, in the UAE, has grown into another major hub. Offshore anchorages near Malaysia host fleets of tankers used as floating storage where cargoes are transferred and blended before entering the market.

Once components from different sources are mixed inside those systems, the resulting gasoline no longer corresponds to any single refinery or country of origin. The blend has a specification. It has a price. It does not have a nationality.

The tankers operating in these regions frequently display the now-familiar behaviour of shadow fleet vessels: AIS signals going dark during transfers, location data becoming inconsistent, gaps in tracking records that are not always large enough to prove anything but are large enough to make reconstructing the cargo's full history a painstaking exercise that most port authorities are not equipped to conduct in real time.

Sulfur: The Invisible Commodity

Sulfur does not feature in most reporting on Russian energy sanctions. It is not crude oil. It is not diesel. It does not fill a car or heat a building. It is a byproduct — stripped from crude during refining, cooled into pellets or blocks, shipped in bulk to fertiliser and chemical producers who use it to make sulfuric acid.

It is also, for that reason, almost entirely untraceable.

Russia produces large volumes of sulfur because its primary export crude — the Urals blend — is relatively sulfur-rich, which the industry calls a sour crude. Processing sour crude requires more intensive desulfurisation equipment, which is one reason large complex refineries in Asia have been particularly eager buyers of Russian grades. The sulfur removed during that processing enters global commodity markets without any geographic signature. There is no test that distinguishes a pellet produced at an Indian refinery processing Russian Urals from a pellet produced anywhere else.

Since sanctions tightened, sulfur shipments have moved increasingly through intermediary trading hubs — Turkey, the UAE — where they are resold and re-exported to industrial buyers before reaching their final destination. By the time the cargo arrives, the original paperwork could reveal where it came from. That paperwork is generally several transactions back in a chain that nobody at the destination port is required to reconstruct.

The Pattern

Crude, diesel, gasoline, sulfur. The commodity changes. The structure does not.
Russian hydrocarbons leave export terminals and enter a system designed, through accumulated layers of shipping, trading and processing, to put distance between the molecule and its origin. Ships obscure where the oil travels. Traders obscure who owns it. Refineries transform it into something that international trade law treats as a different product entirely. By the time the fuel reaches its final market, the journey it has taken through the Russian energy system is commercially invisible — even though the hydrocarbons themselves are chemically unchanged.

It is in that distance, measured not in kilometres but in transactions and transformations, that the sanctions-era energy trade continues to operate.

The Numbers

Three years after the sanctions that were supposed to constrain Russia's oil revenues, it is worth sitting with the actual figures.

Russia's seaborne crude exports run at roughly three to 3.5 million barrels per day. Research by the Kyiv School of Economics estimates that approximately 83 per cent of those seaborne exports now move on shadow fleet vessels — tankers operating entirely outside the Western shipping and insurance system. That translates to around 3.1 million barrels per day carried by ships that sanctions were specifically designed to exclude from this trade.

Of the shadow fleet vessels tracked by analysts, 96 per cent are more than fifteen years old. Western governments have sanctioned at least 621 individual tankers. As of early 2026, at least 140 of those sanctioned vessels were still loading Russian oil. In January 2026 alone, 166 shadow fleet tankers transported Russian crude cargoes — a figure that illustrates something important about the relationship between the pace at which vessels are sanctioned and the pace at which the fleet recycles names, flags and ownership structures.

On revenue: before the war, Russia earned from oil exports what analysts estimated at well over 200 billion dollars per year. Sanctions, price discounts and the additional costs of the shadow fleet have eroded that figure. Recent estimates put Russian oil export revenue at around 160 billion dollars in 2025, with projections for 2026 closer to 115 billion dollars as enforcement has incrementally tightened. Even at the lower end, the numbers are extraordinary. During much of 2023 and 2024, Russia was earning close to 600 million dollars per day from oil exports.

Discounted oil, sold at scale, still generates extraordinary sums.

Why It Keeps Running

The question worth asking is not just how the laundromat works, but why everyone involved keeps using it.

The answer, mostly, is money. But not entirely.

For importing countries like India, the Russian discount is not a marginal saving — it is a structural economic advantage. A refinery importing ten million barrels of Russian crude at a twenty-dollar discount is saving two hundred million dollars on that single transaction. No compliance concern expressed by a Western government is going to move that calculation unless it is backed by a credible threat of consequences.

For the refineries themselves, cheap Russian feedstock created something close to a windfall. The gap between the cost of crude and the price of refined products — the refining margin — expanded sharply when feedstock prices fell while product prices held. Indian and Turkish refineries benefited from exactly this dynamic through 2022, 2023 and into 2024.
For the trading houses in Dubai, the margin is the point. Arranging a shadow fleet tanker, structuring a multi-step commercial chain, and navigating documentation requirements across multiple jurisdictions — these are services with a price. On a large cargo, the spread between what a trader pays for Russian crude and what it charges the refinery can generate millions of dollars in profit from a single transaction. Multiplied across dozens of shipments per month, it is a substantial and growing business.

And for Russia, the discounts it offers are simply the cost of keeping the system running. Revenue at a discount is preferable to no revenue. The alternative is worse.
But money is not the whole story. There is a second driver that gets less attention: reputation.

Not every buyer using the laundromat is legally obliged to. For certain energy products on certain trade routes, no sanctions apply at all. A European industrial buyer purchasing Indian diesel faces no legal barrier and no compliance obligation — the product is Indian, the paperwork is clean, and the transaction is entirely above board. And yet some of those buyers still prefer not to know too much about where the feedstock came from. Others actively value the distance the laundromat provides. Buying from a Dubai intermediary or an Indian refinery rather than a Russian producer directly means they can present themselves — to shareholders, to regulators, to their own procurement committees — as having nothing to do with Russian energy. The transformation does not just change the legal identity of the oil. It changes the story the buyer gets to tell about themselves.

This reputational function is genuinely useful to intermediaries. It is part of what they are selling. A trading house that can deliver Russian-origin products under documentation that names no Russian entity is offering something beyond logistics — it is offering plausible distance. That has value even when it is not strictly necessary. Perhaps especially then.

The countries most directly involved — India, Turkey, China, the UAE — have each decided, for reasons of national economic interest, not to disrupt it. India has been explicit that its energy procurement decisions are made based on what is best for the Indian economy, not in coordination with Western sanctions regimes it never signed. Turkey has maintained a similar posture, balancing NATO membership against the economic benefits of continued engagement with Russian energy trade. China has not engaged with the Western sanctions framework at any level.

This is what makes the laundromat so durable. It is not a conspiracy. It is an ecosystem — a web of incentives, legal structures and jurisdictional gaps that functions because it is profitable for almost everyone involved, and because the rules designed to stop it run out at the edges of the jurisdictions that wrote them. For those outside those edges, the system offers something simpler still: a way to buy what they want, and not have to think about where it came from.

What Would Change It

The sanctions exist. The trade exists alongside them. The gap between those two facts, measured in barrels per day and dollars per barrel, is what this investigation has attempted to describe.

Part of what makes enforcement so difficult is the jurisdictional. The countries operating the shadow fleet, processing the crude and trading the products — Russia, India, China, Turkey, the UAE — are not subject to Western sanctions and are not obliged to enforce them. Western sanctions bind Western companies and apply to transactions touching Western financial infrastructure. They do not bind the rest of the world, and the rest of the world, it has become clear, is large enough to sustain the Russian oil trade without Western participation.

Part of it is structural. The global oil market was designed over decades for efficiency, not traceability. Blending, trading, refining and re-exporting are all normal activities. Building enforcement systems capable of following individual barrels through all those transformations — at the speed and scale of global commodity markets — would require a level of monitoring infrastructure that does not currently exist and that most importing countries have no interest in building.

What would genuinely close the gap runs into something harder: the sovereign economic decisions of countries that have concluded, reasonably enough from their own perspective, that cheap Russian oil serves their national interest better than Western approval.
The Marquise is still sailing. The laundromat runs. And every day, new barrels enter the machine.