NEW DELHI: The diplomatic statements are measured, the economic arguments well-rehearsed. India, the world’s third-largest oil importer, has consistently defended its procurement of discounted Russian crude as a necessary economic decision for a developing nation. But beneath the surface of this geopolitical standoff with Western allies lies a far darker and more complex reality—one that intersects directly with transnational crime, sanctions evasion, and a shadowy global network of oil traders and tanker fleets.
Since the onset of the Ukraine conflict and the ensuing Western sanctions on Russian energy exports, India’s imports of Russian crude have skyrocketed from near zero to over 1.8 million barrels per day at their peak. This pivot, while providing significant fiscal relief, has forced Indian refiners and the government to navigate a deliberately obfuscated ecosystem. The oil is no longer bought on transparent markets; it is brokered through a labyrinth of traders based in Dubai, Hong Kong, and other hubs, often using complex ship-to-ship transfers in the dark of night on the high seas.
The primary criminal risk emerging from this arrangement is the rise of the so-called ‘shadow fleet’—an armada of aging tankers with opaque ownership, often carrying flags of convenience and dubious insurance. Intelligence reports from European agencies, reviewed by this publication, indicate that hundreds of these vessels are now dedicated to moving Russian oil. Their operations are a masterclass in deception: frequently turning off transponders to hide their location (a practice known as ‘going dark’), conducting risky offshore transfers in the Baltic Sea and the Atlantic, and regularly changing their registered ownership through shell companies in a single day.
Why is this a crime story? Because this ecosystem is a petri dish for illicit finance and sanctions busting. The payments for this oil are a nightmare for compliance officers in Indian banks. To avoid the US-led price cap and sanctions, deals are structured using a mix of currencies, including UAE dirhams and Russian roubles, often routed through third-country banks with lax oversight. There is a tangible fear within Indian enforcement agencies that this system could be, and likely is being, exploited by actors with links to organized crime or even terrorist financing networks to launder money. The sheer volume of money flowing through these channels—billions of dollars monthly—makes it an irresistible target for corruption and illicit activity.
The environmental crime angle is equally alarming. These shadow tankers are often poorly maintained and uninsured. A major spill from one of these vessels in the congested and ecologically sensitive waters around Sri Lanka or the Indian coastline would be an environmental catastrophe with no liable entity to cover the damages. It is a ticking time bomb, and Indian coastal authorities are ill-equipped to monitor the hundreds of such vessels now routinely passing near its shores.
India’s official stance remains one of pragmatic economics. Officials point to the nation’s duty to secure the best deal for its citizens and argue that if they don’t buy the oil, others will. However, the unspoken truth is that this economic benefit comes with a mounting criminal and security liability. The very networks that facilitate the evasion of sanctions on Russian oil are the same ones that traffic arms, drugs, and people. By engaging with them, India risks becoming enmeshed in a global web of illegality that extends far beyond the energy sector.
The question is no longer just about diplomacy or economics. It is a question of national security. Are the short-term gains from cheap oil worth the long-term cost of empowering shadowy international criminal networks that operate with impunity? As the US increases its scrutiny, India must look beyond the barrel and confront the crime story unfolding beneath the waves.
