DONALD Trump has promised to settle the Russia-Ukraine war within 24 hours of his imminent return to the White House.

This will presumably be after lunch, following the round-up of millions of immigrants and the imposition of sweeping tariffs on world trade by way of immediate post-breakfast priorities, making for an at least moderately busy day in the office.

So, everything will be done and dusted and it will be shipping and marine insurance business as usual come January 21 next year, right?

Perhaps not. While nobody would wish to fault the sweeping ambition of America’s president-elect, bringing a stop to a horrible three-year conflict that may already have claimed hundreds of thousands of lives is unlikely to prove a simple or straightforward task.

A forced resolution that leaves Putin in control of extensive Ukrainian territory will be swallowed reluctantly, if at all, by Zelenskyy and the coalition that has rallied to the support of his cause and quite beyond overnight implementation.

Even if the art of the deal eventually does get us to this point — and given the weight of the US in international affairs, that does look the probable outcome — the extensive regime of Western sanctions that has been erected since Z-emblazoned Kremlin tanks rolled over the borders will take much time to unpick.

The initial prospectus is for a ceasefire in the early part of 2025, and if that puts a stop to the bloodshed, it will be a step forward from a humanitarian perspective.

But there are plenty of historical precedents for peace talks rumbling on for years after the culmination of the shooting. Indeed, the two Koreas are still technically at war, more than seven decades after the ceasefire of 1953.

As Lloyd’s List has reported this week, both the UK and the EU have ratcheted up existing punitive measures, despite full knowledge of Trump’s declaration of conciliatory intent.

The UK on Monday added two more Russian marine insurers to its list of designated sanctions and targeted 30 additional dark fleet* tankers, bringing the total listed by the Office of Financial Sanctions Implementation to 73.

On Thursday, the EU followed through with a draft document naming 50 vessels said to be engaged in “irregular and high-risk shipping practices”, including the theft of Ukrainian grain.

Even in the US, two congressional representatives — significantly, one of them a Republican — have demanded increased scrutiny of Hong Kong’s alleged facilitation of sanctions evasion.

The trouble is, the available evidence suggests that these policies, for all their obvious moral justification as a deterrent to aggression, are not having the desired impact.

Russia’s gross domestic product grew by 3.5% in 2023 and is forecast to increase by another 3% this year, figures that would be envied by governments across a largely stagnant western Europe.

If anything, the stimulus resulting from what economists sometimes dub “military Keynesianism” and the falling rouble-dollar exchange rate has generated a degree of overheating, with the central bank forced to hike up interest rates to 21% to counter inflation now nudging double-digits.

Given the centrality of oil exports to the Russian economy, the $60 a price cap appears simply not to be biting, thanks to a well-organised circumvention effort and no lack of willing buyers in the developing world.

Tanker operators foregoing the fixtures and marine insurers unable to write the business will privately be asking what exactly their uncompensated loss of income has achieved.

There are also fears that the emergence of the dark fleet, and a parallel bifurcation of marine insurance, marks a permanent departure from the past.

We have not yet had a serious uninsured oil spill from a dark fleet tanker. But the odds of such an occurrence are considerably greater than nugatory.

We are where we are, and where we are is not a good place. Sanctions on Cuba were first introduced by John F Kennedy in 1962 and are still extant.

Barring the unexpected democratisation of Russia, there is no reason not to expect sanctions on the latter country to enjoy similar longevity.

In that eventuality, Western shipowners and underwriters may have to face kissing goodbye to a once-lucrative revenue stream for the medium to long term, and quite possibly permanently.

* Lloyd’s List defines a tanker as part of the dark fleet if it is aged 15 years or over, anonymously owned and/or has a corporate structure designed to obfuscate beneficial ownership discovery, solely deployed in sanctioned oil trades, and engaged in one or more of the deceptive shipping practices outlined in US State Department guidance issued in May 2020. The figures exclude tankers tracked to government-controlled shipping entities such as Russia’s Sovcomflot, or Iran’s National Iranian Tanker Co, and those already sanctioned.

Download our explainer on the different risk profiles of the dark fleet here  

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