A tanker accident in one of the busiest shipping lanes in the world raises questions: Last week, an explosion occurred off the Malaysian coast on the tanker Pablo. Of the 28 crew members, 25 were rescued. Two Indians and a Ukrainian have been missing since Monday last week.

Christoph Hein

Business correspondent for South Asia/Pacific, based in Singapore.

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The tanker is one of the ever-growing "shadow fleets", mostly outdated ships that transport oil from sanctioned countries such as Russia, Iran and Venezuela, especially to India and China. Especially in the narrow, busy shipping lanes, they pose a growing threat to maritime trade. The accident occurred just off Singapore, the second largest container port in the world.

The Pablo, which has now exploded, is registered in Gabon, Central Africa. According to shipping circles, however, it was not reported there until six days before the accident. Since the explosion, the authorities and the shipping industry have been trying to shed light on the matter. This much seems clear: the Aframax tanker, which can transport more than 700,000 barrels (barrel of 159 liters) of oil, belongs to the shipping company Pablo Union Shipping, which resides in the Marshall Islands. However, she seems to have only this one ship and is difficult to reach.

Actually ripe for scrapping

The tanker already belonged to Indian owners and those from the United Arab Emirates. He changed his name at least four times, is a quarter of a century old and ripe for scrapping. The Aframax class was founded by Shell in 1954 and is now considered medium-sized. There is also no sign of Pablo's insurance. Therefore, no salvage was initiated. There is no cargo, the sale of which could later offset their costs.

However, it is a stroke of luck that the tanker passed Malaysia largely empty on its way back from China. Captain Lepyoshkin Oleksandr said that at first there was a powerful explosion. She lifted off the entire deck of the tanker. Then the fire broke out. Images quickly appeared on the Internet showing a huge cloud of smoke over the fuselage. In the meantime, oil residues have been found on the Malaysian island of Pulau Tinggi, about 40 nautical miles away.

In spite of everything, more in demand than ever

Despite all the risks, the "shadow fleet" is currently more in demand than ever. It will comprise around 600 ships, which will mainly transport oil from Russia, Iran and Venezuela. Hundreds of tankers, often outdated, have been acquired by largely unknown buyers since the Russian invasion of Ukraine, instead of scrapping them as expected, according to Singapore. "The tanker division has worked hard for a long time to become something like the Rolls-Royce of shipping. Now the shadow fleet and the characters it attracts are risking the reputation of the industry," industry expert Michael Grey warned last December: "With the participation of three autocratic regimes in Venezuela, Iran and Russia, and with the participation of those who see lucrative opportunities in facilitating the transport of sanctioned oil, a considerable part of the fleet is now operating in secret," he explained.

Of course, the serious part of the industry warns. "The incident with the Pablo is a tragedy and reminds us that the Shadow Fleet poses a serious threat to people and the environment," says Rolf Thore Roppestad of the insurer Gard SA. "The crews, their families and the coastal inhabitants pay the highest price." The risk of similar accidents is high, warns the expert. The Pablo is said to have been at a shipyard near Shanghai for two months. Previously, according to ship trackers, it had twice delivered Iranian oil – which the Americans have sanctioned – to China. Just last year, the tanker Young Young carrying oil from Venezuela ran aground off the Indonesian Riau Islands.

Currently, around 3.4 million barrels of crude oil are loaded daily through Russian ports for the remaining buyers China, India and Turkey. So far, the 700,000-barrel daily cut in exports announced by Moscow's Energy Ministry in March is not reflected in the data of international agencies. The supply stops to Germany and Poland a few months ago have even increased maritime trade, the industry reports.

Many of the shadow tankers state that their destination is "unknown Asia" – which is mostly India and China. Malaysia, Oman or the United Arab Emirates are often indicated as senders in the papers. More than 60 ship transhipments have been registered in the Mediterranean since the beginning of the year, also to disguise their origin.

Trade appears to be so institutionalised that several Russian ministers have already pushed for the establishment of joint ship insurance companies and reinsurers with India, for example, in recent weeks. True, some of the tankers are still covered by Western companies. But their risk is growing because of the price caps imposed by the G7 on oil from Russia, which must not break their oil shipments, and the growing sanctions. At the same time, a major risk is growing in Russian waters: no international company insures ships there anymore. It remains to be seen whether the Russian state will step in in the event of a disaster.