KSE Institute has released a new report, “Oil Spill Insurance and the Shadow Fleet,” examining P&I insurance coverage across the global tanker fleet, with a particular focus on the ships that deal with Russian oil.

The report identifies around 14,000 active tankers that form the global fleet and compiles a list of 141 P&I insurance providers recognized by flag states. A review of 42 publicly available databases establishes the insurance status of these vessels. The analysis highlights key differences across the global fleet, including ships transporting Russian oil or operating as part of the shadow fleet.

The global tanker fleet consists of around 14,000 vessels, including 3,000 crude oil tankers and 11,000 product and chemical tankers. Most vessels are small, mainly those transporting oil products and chemicals. Crude oil tankers are much larger, typically Aframax-size or bigger, with an average deadweight of 170,000 tons—ten times that of the average product tanker. Flags of convenience, which allow vessels to register with no real ownership ties to the country, play a key role in global tanker operations.

Insurance data is available for only 63.5% of the global fleet, leaving 36.5% uninsured or lacking public records. Among the 8,935 tankers with known insurance, 91% are covered by the International Group of P&I Clubs (IG). Non-IG providers from oil price cap coalition countries cover 545 ships, while non-coalition providers insure 711 vessels. However, insurance data is missing for 5,134 vessels.

Among the 6,444 tankers that carried oil in 2024, 84% have IG P&I insurance, while coverage is unknown for 12.3%. This group has a high IG coverage rate as it includes fewer small tankers, which are harder to track—only 10.6% have a deadweight below 10,000 tons. Smaller tankers have a much lower IG insurance rate, with just 29.1% covered compared to 82.7% of vessels over 10,000 tons.

Tankers carrying Russian oil are significantly less likely to have IG P&I insurance. In 2024, only 29.4% of tankers transporting Russian crude oil and 56.2% of tankers carrying Russian oil products had IG coverage. This contrasts sharply with vessels carrying only non-Russian cargo, over 90% of which are IG-insured. A higher volume of Russian crude is linked to lower insurance rates, reflecting efforts to bypass the oil price cap.

Shadow fleet vessels operate with minimal transparency. Among 4,539 tankers with no ties to oil price cap coalition countries, P&I insurance providers are known for only 6.3%. For vessels carrying Russian oil, just 16.9% have identifiable coverage. This lack of transparency makes it extremely difficult to verify compliance with IMO insurance standards.

Tankers with and without IG P&I insurance differ in age and flagging. On average, IG-insured vessels are nearly four years younger than tankers without coverage (14.4 vs. 18.1 years). More than 75% of non-IG-insured ships are over 15 years old, and about 25% exceed 20 years. Flagging also shows major differences, with 64.2% of non-IG-insured vessels registered under grey-listed, black-listed, or unranked jurisdictions, compared to just 25% of IG-covered ships.

Russian P&I insurers provide little transparency, disclosing coverage for only 220 tankers. This includes AlfaStrakhovanie, sanctioned by the EU, US, and UK. Ingosstrakh, sanctioned in the US and UK, plays a key role in shadow fleet insurance but does not disclose its coverage. The lack of transparency is a major concern, as is the fact that many P&I policies involve sanctioned insurers or are reinsured by restricted entities like RNRC.

Sanctions coalition countries should continue their efforts to shed light on oil spill insurance. The lack of transparency in shadow fleet P&I insurance, combined with certain flag states failing to enforce international regulations, makes it difficult for potentially affected coastal states to even assess risks. 

KSE Institute supports recent initiatives like the Nordic-Baltic proposal to implement insurance checks in key maritime zones such as the Baltic Sea and English Channel. This approach, combined with designating non-compliant vessels and strengthening IMO oversight, is critical to reducing risks from shadow fleet operations. By closing insurance loopholes and enforcing compliance, the maritime industry can better address the environmental and safety risks posed by aging and poorly insured vessels.