The US last week struck three commercial tankers in the waters off Oman, killing three Indian sailors and triggering operations to rescue dozens from the burning and sinking vessels. The action, the US said, was to enforce its naval blockade for vessels coming from or going to Iran.
The strikes drew a formal protest from New Delhi, but the US asserted that the three ships had violated its blockade imposed since mid-April. The ships’ crews, and in at least one case, the management company, denied the charges.
But the episode brought a separate question into focus: the flags on the masts of those vessels.
Two flew the flag of Palau, a small island nation in the western Pacific Ocean, and the third flew the flag of Guinea-Bissau, a small state on the Atlantic coast of West Africa.
Neither is known for a major commercial shipping industry.
While it is unclear if the three ships were involved in any illicit activity, maritime transit observers and analysts say vessel owners often register under flags of smaller nations to evade regulatory scrutiny, and reap the benefits of low costs and little oversight. These, the industry says, are “flags of convenience”.
‘Flags of convenience’
The use of a ‘flag of convenience’ does not, by itself, indicate any illegal activity, but these have become more commonly associated with what the maritime industry calls the shadow fleet.
Shadow fleet refers to a network of tankers and support vessels that use deceptive practices to move sanctioned or high-risk commodities while concealing their true origin, ownership or destination.
All three vessels struck last week carried signs that maritime analysts and investigators associate with shadow fleet operations — sanctioned designations, safety violations, opaque ownership structures and in at least one case, the deliberate disabling of tracking signals, HT reported last week.
India’s external affairs ministry confirmed that two of the three ships had been sanctioned by the US’s Office of Foreign Assets Control (OFAC) and the third was “non-compliant”.
The Palau-flagged tanker, linked to Panama-based Arihant Shipping, was sanctioned by OFAC in December 2025 under its former name ‘Arihant’ for allegedly carrying Iranian oil and bitumen in the Gulf. The ship was renamed and withdrawn from the Indian Register of Shipping in February 2026 — a step that typically voids a vessel’s insurance and legal operating status. When US forces warned it on June 7, it initially signalled compliance, then switched off its transponders to conceal its position, HT reported last week.
The Settebello, on which the three Indian seafarers died, had its maritime classification suspended in 2021 and was detained twice — at Russia’s Novorossiisk in 2022, with 29 deficiencies, and at China’s Lianyungang in February 2026. Its owner, Aqua Aurora Shipping Lines, once shared a Chandigarh address with Global Tankers Pvt Ltd, a firm whose controlling individual OFAC had sanctioned in April 2025 — though HT found the address long vacated. Its operator IOS Marine denied any Iran link and said the vessel was never contacted before the strike.
The Guinea-Bissau-flagged asphalt tanker, owned by Liberia-based Jal Shipping, was detained at India’s Haldia port in February 2026 for fire-safety deficiencies. No OFAC sanction is recorded against it, the foreign ministry said. Persons aware of the matter had told HT the vessel had made multiple calls at Iranian ports and conducted ship-to-ship transfers with sanctioned vessels.
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The motive
A 2024 study published in the peer-reviewed journal Applied Sciences (MDPI) noted that shadow fleets expanded sharply after Russia invaded Ukraine in February 2022 and western nations imposed sweeping sanctions on Moscow’s oil exports as economic punishment for the war.
To move sanctioned oil, multiple workarounds were found. According to the study, hundreds of vessels, one-thirds of which were crude oil tankers, were put into use to move sanctioned Russian crude to non-sanctioned buyers.
The study estimates that by September 2023, the fleet accounted for 10% of global seaborne oil transportation, and around 600 tankers from a total network of roughly 6,000 were engaged in covert operations. By 2024, the ‘dark’ fleet was as large as 1,100 vessels, it said.
The evasion tactics largely involve three purposes: dodging tracking (which can establish where they went and what they did), avoiding stricter regulatory scrutiny, and staying protected from sanctions.
Vessels involved in such operations are known to disable their Automatic Identification System (AIS) transponders — the maritime equivalent of an aircraft’s transponder, which broadcasts a ship’s identity and position in real time — to escape scrutiny.
Others engage in AIS spoofing, or broadcasting false location coordinates while conducting ship-to-ship transfers of sanctioned cargo in international waters. This is why ship-to-ship transfers of sanctioned oil are often corroborated by satellite images.
The MDPI study also documented what are called “ghost ships”, or vessels fabricated entirely from false AIS signals.
Then there is “flag hopping” — rapidly switching a vessel’s registration across jurisdictions — to stay ahead of sanctions designations. Linked to this is opaque corporate ownership structures that make it difficult to trace which companies or individuals actually control a vessel — an approach believed to have been employed in the case of the three vessels.
The flags most commonly used include Panama, Liberia, and the Marshall Islands, but, as the MDPI study noted, countries including Cameroon and Gabon have also been implicated. For instance, the Jalveer flew the flag of Guinea-Bissau while its owner, Jal Shipping, was itself registered in Liberia — illustrating how operators layer registrations across multiple jurisdictions to complicate scrutiny, HT reported last week.
The waters off West Africa, the study said, have become a hotspot for AIS spoofing.
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How successful is this model?
There is little clarity on how much sanctioned oil was transported and bought since 2022.
But Finland-based non-profit Centre for Research on Energy and Clean Air (CREA) estimated that 113 vessels flying false flags transported €4.7 billion worth of Russian oil in the first three quarters of 2025 alone.
Iran, already under decades of US sanctions, is believed to have long relied on similar tactics to move its oil by seas. A 2026 investigation by Al Jazeera said Tehran built a parallel maritime system by allegedly using fake flags, shell companies and disabled tracking signals to sustain exports.
When the US imposed its naval blockade from April 13, amidst the West Asia conflict, this network proved difficult to shut down. Lloyd’s List Intelligence, which tracks maritime traffic and data, said in a report later that month that at least 26 ships had bypassed the blockade even as Washington claimed it had halted Iranian trade entirely.
