As the world’s attention is fixed on Ukraine, a far more dangerous crisis is brewing in the Baltic – one that could explode this summer. A deadly showdown between Russian and Nato vessels is ever more likely on its dark waters that could make the events on the steppes of Donetsk look like a playground scuffle.
For months, Nato countries have reported a string of sabotage attempts on vital undersea internet, energy and communications cables. Then, last week, Russia’s Baltic and Northern Fleets launched a massive display of military strength in those waters: more than 20 warships, 25 aircraft and helicopters, and 3,000 troops took to sea.
So what lies behind these increasingly sinister provocations? The answer: oil. Specifically, billions of pounds of Russian petrochemicals being smuggled through the Baltic and North Seas to any country willing to buy them. For Vladimir Putin, this illicit trade is a financial lifeline – without which he could not fund his bloody war in Ukraine. And make no mistake: he’s prepared to go to war to protect it.
The stakes could not be higher. As Sweden’s defence minister Pal Jonson warned: ‘Russia has a propensity to take great political and military risks.’
Putin’s oil business is sustained by a so-called ‘shadow fleet’ – a ghost armada of some 1,400 ships, the largest covert operation in maritime history. Until recently, Moscow denied these ships even existed. But under pressure from sanctions and seizures, Russia is now increasingly defending the fleet with air and sea power – sending a chilling message to Nato: interfere, and we will act.
For the Kremlin, this fleet is as vital as the North Atlantic convoys were to Britain during the Second World War – but instead of providing critical supplies to a nation fighting for its life, it bankrolls death and destruction in Ukraine.
To understand how we got here, we must rewind a few years.
Russia’s war machine is funded by both legal and illegal oil sales. In December 2022, the West (the G7, EU and Australia) agreed to stop paying more than $60 per barrel of Russian oil – at least 5 per cent below the average market price – to squeeze Putin’s war chest. Officially, Russia complies with that price cap – and oil and gas still account for a third of its state income. Since 2022, the EU has spent more than £200billion on Russian fossil fuels.
Vladimir Putin has been maintaining Russia’s war chest through both legal and illegal oil sales
Russian ships take part in naval war games in the Baltic Sea. The country’s navy is thought to have tampered with the West’s undersea cables several times since it invaded Ukraine in 2022
But Putin has also been illegally selling oil above the cap but below market price to countries such as China and India via a murky web of illegal tankers and middlemen.
These ships he hires to transport this filthy cargo, which sail alongside the legal vessels, are often uninsured, poorly maintained and registered in corrupt African states or shady jurisdictions. Many are fronted by Russian agents or unscrupulous businessmen who pocket millions to enable Putin’s murderous conflict.
The scale of this dark trade is eye-watering. Experts estimate that while Russia’s legal oil exports total around £184billion a year, the illicit figure is closer to £516billion – all directly sustaining the Kremlin’s military machine.
Many ports, especially in Turkey and India, have eagerly snapped up the black-market oil and made heightened profits. But it’s getting harder for Russia. Hundreds of ships have now been sanctioned. Back in December, Britain and all 12 Baltic Sea nations pledged to disrupt and deter the sanctions-busting fleet. On May 20, the EU unveiled its 17th sanctions package, targeting 343 ships, which means, technically at least, they can’t enter ports without those sites also facing secondary sanctions.
To avoid those black-listed ports, ‘dark fleet’ Russian tankers now offload illegal oil mid-ocean on to unsanctioned ships in dangerous high-seas transfers. This perilous practice often takes place in the Black Sea and the Aegean and already two major oil spills have been reported in December 2024 in the Black Sea.
Worse, refineries in Turkey, India and elsewhere are mixing legal and illegal Russian oil and selling it on legitimate global markets.
These dirty tricks had continued largely unnoticed until this year, when suspicions mounted that Putin’s shadow fleet might also be attacking the West’s undersea cables.
Late last year, the Eagle S ship was allegedly caught dragging its anchor along the seabed. On Boxing Day, Finnish border guards stormed the vessel via helicopter and detained it – and its Russian crew – only to release it later due to loopholes in maritime law, which often protects ships over sovereign nations.
On May 10, the UK sanctioned another tanker, the Jaguar, as it entered the North Sea. Estonia later attempted to intercept it in the Baltic. The Russian captain refused to stop and accelerated. Moments later, a Russian Su-35 fighter jet breached Estonian airspace – a menacing flex of muscle. The Estonians escorted the tanker out of their waters.
This incident marked a turning point – the first time Russia had openly defended its shadow fleet with military force. Since then, tensions have only escalated. Just last week, Finland reported that Russian warships are now openly escorting these tankers.
Russia’s shadow fleet is now operating in plain sight.
It may only be a matter of time before one of these tit-for-tat seizures spirals into something far more dangerous that has terrifying consequences for Nato.
In one chilling scenario, Russia could deliberately strike a Nato naval vessel belonging to a small member nation – gambling that the organisation’s leaders will do anything to avoid escalation, paralysed by the fear of a Third World War. Russia might even bank on such a crisis shattering the alliance’s unity – a win-win for Putin.
Or Russia might double down on cable sabotage operations. Under its ‘total war’ doctrine, crippling civilian infrastructure is a legitimate tactic. Destroying cables or pipelines would be extremely difficult to prove, and therefore a Nato military response unlikely. But the message from Putin would be clear: touch our oil, and we’ll turn off your lights and your internet.
A third and perhaps most likely trigger is a mistake or a miscalculation. A hot-headed Russian pilot might shoot down a Nato aircraft. Or an unmarked, rogue tanker could collide with a ferry in the foggy Baltic, killing civilians. It’s not out of the question: in January, a shadow-fleet vessel lost power and drifted into German waters. It’s only a matter of time before there’s a fatal crash. In the air, a Western passenger plane might collide with a Russian fighter. Even now, these warplanes regularly disable their transponders, refuse to file flight plans or establish contact with air traffic controllers.
The nations around the Baltic Sea, including the three Baltic republics that more than 30 years ago helped bring down the Soviet Union, say they will not be intimidated. That means this crisis is set to continue until it comes to a head.
Opposing them is a ruthless dictator, addicted to the billions his illegal oil armada pours into the Kremlin’s war chest. Putin will not relinquish this trade lightly.
In the Army, there’s an expression: ‘If it’s freezing, it’s Baltic.’ Well, the Cold War in the Baltic is starting to heat up. And one spark, one miscalculation, could set it ablaze.
Dr Bob Seely’s book, The New Total War, is published next month by Biteback.
