Contributing author: Dimitris Ampatzidis, Senior Risk & Compliance Analyst at Kpler
A confluence of new sanctions, evolving regulations and escalating geopolitical tensions has placed marine insurers squarely in the spotlight. At a time when maritime trade is striving to recover from global disruptions, underwriters are confronted with an unprecedented maze of rules designed to curtail the flow of sanctioned oil and other commodities. From the United Kingdom’s Office of Financial Sanctions Implementation (OFSI) to the European Union’s frameworks and the United States Office of Foreign Assets Control (OFAC), regulators are tightening their grip on the shipping sector.
In April 2025, for instance, OFAC issued a revised maritime sanctions advisory which notably extended its definition of deceptive shipping practices (DSPs) to include identity manipulation, falsified documentation, front organisations, and shadow fleet tactics in oil trade—particularly around Iranian exports. Meanwhile, the UK updated its “Maritime Services Ban and Oil Price Cap” guidance in July 2025, reducing the crude oil price cap to $47.60 per barrel and clarifying expectations for insurers to ensure compliance under that lower cap.
This expanded regulatory reach has thrust the marine insurance world into unfamiliar territory. The EU’s 17th and 18th sanction packages, introduced in mid-2025, have increasingly targeted vessels in the shadow fleet, subjecting them to port access bans and restrictions on insurance or reinsurance, even when the vessels are registered in third countries. On the UK side, authorities are now openly demanding insurance documentation from vessels transiting key European waters, and have sanctioned 135 “shadow fleet” tankers in July 2025 for evasion behaviour and lack of compliance. Meanwhile, insurers face the twin risks of severe financial penalties and reputational damage should they inadvertently provide cover to prohibited activities. Addressing this challenge demands a more forensic approach to underwriting and claims scrutiny, underpinned by real-time data, comprehensive vessel tracking and close collaboration with international watchdogs.
A changing tide: sanctions expand their reach
Historically, sanctions in maritime activities targeted a limited number of jurisdictions. Today, however, they are increasingly tailored to specific commodities, shipping corridors and even types of financial transactions. Insurers must now determine not only the lawfulness of a vessel or its cargo but also whether its trading falls below an imposed price ceiling, as reinforced by the recent July 2025 adjustment of the UK’s oil price cap to $47.60 per barrel under OFSI and FCDO guidance. At the same time, the EU’s 17th and 18th sanctions packages have extended restrictions to vessels suspected of shadow fleet activity, regardless of flag, creating new insurance and reinsurance exclusions that underwriters must factor into their assessments. Gone are the days when a simple blacklist sufficed; modern underwriters must scrutinise trade documentation, shipping logs and beneficial ownership records in ever-greater detail.
The situation is further complicated by the rapidity with which regulators act. In April 2025, OFAC expanded its maritime advisory to include deceptive practices such as identity manipulation and false cargo documentation, obliging insurers to monitor transactions with much greater granularity. New restrictions may be announced at short notice, or existing lists may be updated with revised identifiers for flagged vessels. Consequently, insurers are required to maintain up-to-date internal watchlists and be prepared to deny or adjust cover swiftly if a client or cargo becomes associated with a newly sanctioned entity. This constant state of vigilance, though undoubtedly onerous, is fast becoming an integral element of modern underwriting.
Market observers note that this shift underscores the strategic importance of maritime transport in advancing foreign policy. With global energy and commodity flows forming the lifeblood of many national economies, targeting shipping has become a potent means of exerting pressure on sanctioned regimes. Yet this policy also places a considerable burden on insurers and their compliance teams, who now effectively serve as frontline enforcers or risk incurring severe penalties themselves.
Deceptive shipping tactics: evading detection
Caught in this tightened regulatory net, operators linked to restricted regimes have become ever more inventive in their strategies for dodging scrutiny. Among the most prevalent tactics are:
AIS manipulation
AIS (Automatic Identification System) signals allow market participants and regulators to track vessel movements. In an effort to conceal their true routes, some ships resort to “spoofing,” broadcasting false coordinates that place them in one part of the world while they are, in fact, loading or unloading cargo elsewhere. Others may switch off their AIS transponders entirely, a phenomenon known as “going dark” to obscure port calls in sanctioned regions or illicit ship-to-ship (STS) transfers.
Dark ship-to-ship transfers
STS operations are a regular fixture in the tanker sector, but the recent rise of “dark” transfers has troubled compliance teams. Vessels may meet clandestinely in remote waters, disabling transponders to avoid creating a digital record of their rendezvous. The cargo is then offloaded onto another tanker, ready to be shipped on to a port that, on paper, appears legitimate. By the time these ships reappear on AIS, any evidence of a mid-voyage transfer may be difficult to trace.
Opaque ownership webs
While legitimate shipping often involves complex ownership structures, sanctions have given rise to a new wave of shell companies. These entities are registered in jurisdictions with minimal disclosure requirements, making it difficult to identify the ultimate beneficiaries. In certain cases, the vessel’s name, flag, and nominal owner may shift repeatedly over a short period colloquially known as “flag hopping” further complicating due diligence for underwriters.
Between October 2023and September 2025, maritime deception tactics have evolved markedly. AIS spoofing spiked sharply from near-zero cases in late 2023 to almost 200 incidents by mid-2024, before declining steadily as regulators deployed enhanced detection technologies and penalties curtailed its effectiveness. Dark STS transfers, however, rose more gradually but persistently, climbing from around 30 monthly cases in early 2024 to over 150 by mid-2025, coinciding with new EU and UK sanctions targeting shadow fleet activity. By late 2025, both tactics showed signs of easing, yet the data underscores a familiar pattern: while spoofing can be mitigated through technological countermeasures, physical evasion strategies such as dark STS transfers remain more durable and continue to challenge insurers’ compliance frameworks.
*To continue next week
