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10 billion dollar plan: How Russia’s ‘shadow fleet’ circumvents sanctions?

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Russia has built a shadow fleet at an estimated cost of around $10 billion, now transporting approximately 70% of its oil and oil products on these tankers. This fleet allows Russia to largely evade restrictions associated with the $60-per-barrel price ceiling. Western sanctions targeting individual tankers and their owners have proven largely ineffective in curbing Russian exports.

According to a report by the Kyiv School of Economics (KSE), cited by the Financial Times, the shadow fleet nearly doubled its capacity to 4.1 million barrels per day in June this year, up from 2.4 million barrels during the same period last year. This represents an increase of almost 71%. Crude oil is now carried almost entirely (89%) by older tankers, with an average vessel age of 18 years, while 38% of oil products are transported by these aging ships.

Some of these tankers are insured against oil spills by Russian companies, though most are reportedly uninsured. The KSE recommends the creation of “shadow zones” in European waters, restricting access to tankers that cannot prove adequate insurance coverage. However, the report warns that under current conditions, “a major environmental disaster is only a matter of time.”

The Financial Times also notes that four tankers in the shadow fleet have experienced engine failures over the past two years at critical points, such as the Danish Straits and the Dardanelles. So far, these incidents have not resulted in oil spills.

Western countries have begun imposing sanctions on individual tankers, as well as on their owners and operators. Benjamin Hilgenstock, one of the authors of the KSE report, stated that these sanctions have been effective in deterring some ships from continuing their operations. However, he emphasized that the overall impact on weakening Russia’s shadow fleet has been limited.

In contrast, Craig Kennedy, an expert on Russian oil operations at Harvard University, noted that Russian oil companies often prefer foreign ownership and operators to conceal their connections to shadow fleet vessels. This practice complicates efforts to sanction the entities involved. Kennedy estimates that Russian companies have spent over $10 billion acquiring old tankers since 2022, primarily financed through Russian banks.

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CERN prepares to export Russian scientists

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CERN, the European particle physics laboratory near Geneva, Switzerland, will stop working with hundreds of scientists affiliated with Russian institutions on 30 November unless they move to institutions outside the country.

This date marks the official end of the laboratory’s cooperation with the Russian Federation, following CERN’s decision to sever ties with the Russian Federation following the start of the war in Ukraine in 2022.

But tensions remain among researchers over CERN’s relationship with Russia, as the organisation will continue to work with Russian scientists through an agreement with the Joint Institute for Nuclear Research (JINR), an intergovernmental centre in Dubna, near Moscow, Nature reports.

JINR’s agreement with CERN is separate from Russia’s agreement with CERN. The decision not to cut ties with the lab has divided scientists, with some pointing to the lab’s relationship with the Russian state as it continues its war in Ukraine.

Boris Grinyov, director of the Institute for Scintillation Materials in Kharkov, Ukraine, who represents Ukraine as an associate member of the CERN Council, the organisation’s governing body, argues that allowing JINR scientists to participate in CERN projects was a “big mistake”.

Neither JINR nor the Russian Ministry of Science responded to Nature’s requests for comment. CERN’s agreement is very clear that we carry out peaceful fundamental research,’ said CERN spokesman Arnaud Marsollier.

Russia’s departure could put CERN, which was set up after the Second World War to bring nations together for “peaceful scientific pursuits”, in a difficult position.

CERN began working with the Soviet Union in 1955. Although Russia has never been a full member and its observer status has been suspended, hundreds of scientists affiliated with Russian institutions contribute to independent experiments on the Large Hadron Collider (LHC) particle accelerator.

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Meta bans RT and other Russian state-owned media networks

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Meta, the parent company of Facebook and Instagram, has banned Russia Today (RT), Rossiya Segodnya, and other Russian state-owned media from its platforms, citing their involvement in deceptive practices to conduct influence operations. In a statement released on Monday, Meta said the decision was made following thorough consideration and is part of expanded sanctions against Russian state media.

“We have taken action to extend our sanctions against Russian state-owned media. RT, Rossiya Segodnya, and related entities are now banned globally from our platforms due to their participation in foreign interference activities,” the statement said. This ban affects Facebook, Instagram, WhatsApp, and Threads.

The move comes shortly after the Biden administration announced sanctions targeting RT and other Moscow-controlled media outlets. U.S. officials have characterized RT as an integral part of Russia’s intelligence operations. Secretary of State Antony Blinken, speaking on Friday, emphasized the importance of truth in countering Russian misinformation. “Our strongest weapon against Russia’s falsehoods is the truth. It illuminates what the Kremlin is trying to hide,” Blinken said.

Earlier this month, the U.S. Department of Justice charged two RT employees with allegedly funding a right-wing media outlet in Tennessee in an effort to sow political division in the United States.

RT, which had 7.2 million followers on Facebook prior to the ban, has not yet commented on Meta’s decision. However, in a previous statement responding to U.S. actions, the broadcaster dismissed the legal charges with a mocking tone, stating: “We eat DOJ indictments for breakfast. Usually with a lot of sour cream.”

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The last major American bank in Russia closes its doors

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American CitiBank, one of the largest Western banks in Russia and one of the country’s 20 largest banks by assets, is winding down its operations in Russia.

According to information obtained by Frank Media from CitiBank, the bank’s subsidiary in Russia will close its last retail branch on 15 November.

The branch near the Paveletskaya metro station in the capital Moscow will also close within two months. Citibank advised its customers to “consider other options for making deposits and other transactions”.

All Citibank debit cards will be invalid from 20 September, and money transfers, ATM cash withdrawals and QR code purchases, including through the Central Bank’s Faster Payment System, will be stopped from 25 September.

Citigroup had planned to sell its retail operations in Russia in early 2021, but decided to close them completely following the military intervention in Ukraine.

The volume of loans granted by the bank since the beginning of 2022 has decreased by 98 per cent to 2.4 billion roubles. Of the 154 billion roubles in deposits from individual clients, only 1 billion roubles remained, and the funds held in commercial accounts fell more than 90 times, from 346 billion roubles to 3.8 billion roubles.

Following Citi’s lead, European banks began to close their operations in Russia. Raiffeisenbank, one of the largest, stopped foreign transfers for most of its clients at the end of August.

The total assets of foreign banks in the country at the beginning of this year will be only $66 billion. This is almost half the pre-war level of 2021 ($119 billion) and less than a quarter of the record level of 2012 ($239 billion).

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