Russian Urals crude oil is transported from western Russian ports to Asia, with the main shipping routes passing through the Red Sea.
Compliant oil tankers, constrained by the Western system, typically rely on formal protection and indemnity (P&I) associations and war risk insurance. When Red Sea risks escalate, insurance companies tighten underwriting to control risk, sometimes even mandating that insured vessels avoid the Bab el-Mandeb Strait. Conversely, sanctioned "shadow fleets," which rely less on European and American insurance and maritime services, are not bound by insurance companies' "no-sail orders" and can continue to choose shorter Red Sea routes.
Current Red Sea security risks impose additional insurance and detour costs on compliant vessels (circumnavigating Africa adds weeks to the journey and significantly increases freight rates), while some sanctioned vessels, outside the Western insurance system, can continue to take shortcuts, creating an unusual cost advantage in transportation.
