Kremlin Turns to Little-Known Shippers to Get Drones

"ISTANBUL -- Russia is adapting to Western sanctions on its military supply chain by turning to a netherworld of shipping and logistics companies to bring in more of the armed drones from Iran now playing a pivotal role in conflict in Ukraine, according to an assessment from the government in Kyiv reviewed by The Wall Street Journal.

Five Russian-flagged ships -- named Baltiyskiy-111, Omskiy 103, Skif V, Musa Jalil and Begey -- have taken 73 trips across the Caspian Sea to ports in Iran over the past year, according to the Ukrainian government document, which is based on intelligence and other sources.

None of the ships is under U.S. sanctions. Washington has imposed sanctions on dozens of commercial vessels and shipping companies for carrying weapons and other military supplies for Russia.

The Ukrainian government document suggests Russia is turning to companies and ships that have fewer overt links to the Russian state and that haven't been targeted by Washington, experts say. Moscow also uses obscure Turkish, Greek and Indian shipping companies to keep its oil exports flowing.

"The tactics are always changing, because it's a cat-and-mouse game," said Eric Woods, a Washington-based expert on Russian weapons trafficking at the Middlebury Institute of International Studies.

Russia began launching Iranian-made Shahed drones at Ukraine in August 2022, often striking  infrastructure far behind the front lines. They have been targeted at water, electrical and heating infrastructure essential for military.

Small, inexpensive and difficult to detect, the drones are designed to explode on impact and have become a persistent challenge for the Ukrainian government. Ukraine has upgraded its air defenses with the help of some Western-supplied weapons in recent months but has no viable way of shooting down all of the drones during repeated waves of attacks throughout the country.

The White House publicly confirmed the use of the Caspian route to transport drones in June. The U.S. has also revealed intelligence confirming Moscow is building a factory to produce the drones inside Russia, with some independent weapons analysts concluding that the plant is at least partially operational.

The ships identified by Ukraine are owned by tiny, low-profile shipping companies based in southern Russia, including three in Astrakhan, close to the mouth of the Volga River on the Caspian Sea. Ukraine imposed sanctions on at least one, Lagoda Shipping, after its ships docked in occupied Crimea. That company and another firm, Astrakhan-based Dalir, the owner of the Baltiyskiy-111, each have only two ships in their respective fleets. Neither company responded to requests for comment.

The cargo ship Begey departed Astrakhan on Aug. 17 and arrived at Iran's port of Amirabad on Aug. 23, according to publicly available shipping data reviewed by the Journal. The U.S. government has identified Amirabad as a departure point for shipping drones. Omskiy 103 also arrived in Amirabad on Aug. 23, one of three trips it has made to Iran since July 1, shipping data show.

The growing reliance on the Caspian route also shows the challenge for Washington as it tries to stamp out Russia's key sources of weapons and other military supplies. Providing a direct path between the two countries with few, if any, links to the Western financial system, the route could be difficult for the U.S. and its allies to sever.

Still, there may be some ways for the U.S. to apply pressure to Russia's secretive supply chain, even in the Caspian, experts say, such as cutting their access to the international insurance market to prevent them from taking on cargoes from other countries.

U.S. sanctions are putting pressure on Russia's supply of arms in other ways, forcing Moscow to turn to a shadowy world of arms dealers to acquire weapons and materials it needs for its military.

In recent months, Russian military procurement networks have had to reroute shipments of electronics to three or four countries before they arrive in Russia in response to U.S. efforts to clamp down on deliveries through Turkey and other countries, U.S. officials say.

"Efficiency and predictability really matter to defense production," a senior U.S. official in Washington said. "What Russia is doing is running an opaque, improvised supply chain."

The Ukrainian government document, which officials say was sent to all members of the Group of Seven major economies, also calls for stricter export controls on commercially available electronics found in the drones.

"Since April-May of this year, the number of [unmanned aerial vehicles] used in one attack has increased significantly," the report states." [1]

Ukraine shoots down inexpensive drones with missiles costing millions of dollars. It's no wonder her allies are uncomfortable with the issue.

1. World News: Kremlin Turns to Little-Known Shippers to Get Drones. Malsin, Jared;
MacDonald, Alistair. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 29 Aug 2023: A.18.