The loading of smuggled oil often takes the form of bunkering, accompanied by false paperwork or other means to hide its source, which is addressed specifically elsewhere on this site.<\/p>\n\n\n\n
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Characteristics<\/h2>\n\n\n\n
Small-scale smuggling<\/em><\/p>\n\n\n\n At its most modest oil smuggling takes place in an individual or ad hoc manner, for example when artisanal fishers smuggle oil to neighbouring countries in small fishing vessels, especially in border areas.<\/span>5<\/sup><\/a><\/span> This often results due from variation in fuel prices due to subsidies and differing tax levels, making it profitable to smuggle oil from a country where fuel is cheaper to that that is more expensive. In some cases fuel can be sold for up to a 1000% mark-up depending on price differentials between the source and terminus.<\/span>6<\/sup><\/a><\/span><\/p>\n\n\n\n Examples include the smuggling of subsidised fuel from Malaysia to Thailand and the Philippines, from Nigeria to its neighbours, or the selling of Venezuelan fuel to offshore vessels.<\/span>7<\/sup><\/a><\/span> These are all oil-producing countries where oil is cheaper than in neighbouring states. Ralby and Soud argue that even though they take place at a small scale, these practices can have significant consequences.<\/span>8<\/sup><\/a><\/span> Smuggled jerry cans of oil from Ecuador, for example, are suspected to help fuel the drug trade in Colombia. In some cases fuel can be sold for up to a 1000% mark-up depending on price differentials between the source and terminus.<\/span>9<\/sup><\/a><\/span> <\/p>\n\n\n\n Large-scale smuggling<\/em><\/p>\n\n\n\n Oil smuggling can also take place at a larger scale and implicate well-organised actors such as transnational criminal networks, militant groups and terrorists, and even states. This form of oil smuggling and the activities that underpin it have sometimes been regarded as security issues and are likely to be more heavily criminalised.<\/p>\n\n\n\n Perhaps the best evidenced case is oil smuggling in Nigeria. Oil is stolen from pipelines or production facilities in the Niger Delta by militant groups and other actors.<\/span>10<\/sup><\/a><\/span> It is then transported to sea in small barges and loaded onto tankers. While some of this oil is refined and sold domestically, it is also smuggled by organised networks of criminals.<\/span>11<\/sup><\/a><\/span> Networks in Europe, Lebanon, Russia, Australia and elsewhere have been found to play roles in financing, transporting, and money laundering throughout this smuggling chain.<\/span>12<\/sup><\/a><\/span> The US, West African countries, Brazil, Europe, and China have all been named as destinations for stolen oil.<\/span>13<\/sup><\/a><\/span> Oil smuggling in Nigeria has also been linked to corruption through the alleged involvement of members of the military, oil company employees, and politicians in the trade.<\/span>14<\/sup><\/a><\/span><\/p>\n\n\n\n Oil smuggling in Nigeria is often highly sophisticated, with criminals using advanced communications equipment and having access to large tankers.<\/span>15<\/sup><\/a><\/span> Smaller tankers will wait until they are relatively full before transferring their illicit cargos to international class \u2018mother ships\u2019 waiting offshore.<\/span>16<\/sup><\/a><\/span>. Illicit oil can be concealed in various ways, including by mixing it with legitimately sourced loads, or transferring stolen oil between vessels to hide its origin. While underway, the ship name, ship\u2019s flag, or the ownership of the oil can be changed multiple times to further obscure its source.<\/span>17<\/sup><\/a><\/span><\/p>\n\n\n\n Oil theft has become one of Nigeria\u2019s most profitable private businesses,<\/span>18<\/sup><\/a><\/span> from which international actors also profit handsomely. However, it is also a problem of development and economic exclusion.<\/span>19<\/sup><\/a><\/span> Some have argued that poverty drives disenfranchised people to attack the pipelines in a context in which it is the elite who primarily benefit from oil revenues, despite the environmental degradation and food insecurity that oil extraction has caused in some parts of the Niger basin.<\/span>20<\/sup><\/a><\/span> Ugor for example, argues that oil theft is best understood as a counterculture that challenges the legitimacy of the Nigerian elite.<\/span>21<\/sup><\/a><\/span><\/p>\n\n\n\n Oil theft and smuggling does not only occur in Nigeria. In Libya, for example, it has been alleged that militant groups work with personnel from the Libyan Coast Guard to transfer stolen diesel to criminal networks in Europe.<\/span>22<\/sup><\/a><\/span> Tankers disable their AIS transponders before entering Libyan waters, and await small vessels ferrying diesel out, before mixing it through ship-to-ship transfers to obscure its source.<\/span>23<\/sup><\/a><\/span> Oil theft and smuggling also takes place in Mexico and Indonesia.<\/span>24<\/sup><\/a><\/span> In other cases, oil is stolen from ships, through piracy or fraud, or from shallow coastal pipelines and oil platforms.<\/p>\n\n\n\n Terrorist & State-sponsored smuggling<\/em><\/p>\n\n\n\n Some cases of oil smuggling have been linked to state-based actors and international terrorist groups. Examples include the movement of oil sourced from or delivered to counties under sanction, such as North Korea<\/span>25<\/sup><\/a><\/span> and Iran.<\/span>26<\/sup><\/a><\/span>. The Islamic State group are also widely thought to have used oil smuggling to help sustain their activities.<\/span>27<\/sup><\/a><\/span><\/p>\n\n\n\n There are no overall estimates of the scale of small-scale oil smuggling and even case-by-case indicators are incomplete. Smugglers in the Malaysia-Thailand case, for example, have had vessels seized with between 10,000 \u2013 200,000 litres of oil onboard, but it is unclear as to how many of these seizures occur annually and how many are successful. <\/span>28<\/sup><\/a><\/span> Ralby and Soud argue the illicit market for Ecuadorian fuel is worth 600 million US Dollars, giving some indication of the scale of the problem in this specific case.<\/span>31<\/sup><\/a><\/span> These numbers are small when compared to the Nigerian case, where estimates have ranged from 100,000 to 400,000 barrels per day over the last two decades.<\/span>32<\/sup><\/a><\/span> This is thought to account for between 10-25 per cent of Nigeria\u2019s daily oil production. These figures fluctuate depending on periodic efforts to police the region.<\/span>33<\/sup><\/a><\/span> There is some contestation over these statistics however. Higher numbers are provided by the Nigerian government, while oil companies claim it is an overestimation and instead reaches a maximum of 200,000 barrels per day.<\/span>34<\/sup><\/a><\/span> <\/p>\n\n\n\n It is also difficult to assess the amount of oil that is smuggled by sanction-busting countries due to the lack of publicly available data. Tanker Tracker, a web-based organisation that tracks illicit tankers with AIS and satellite data, argue that Iranian oil smuggled to Syria by one ship alone reached 1.4 million barrels.<\/span>35<\/sup><\/a><\/span> At its peak, it is thought that Iran can smuggle up 300,000 – 900,000 barrels per day.<\/span>36<\/sup><\/a><\/span><\/p>\n\n\n\n As such, while there is no overall estimate, it is clear that the problem of oil smuggling is large in scope.<\/p>\n\n\n\n Economic<\/em><\/p>\n\n\n\n Oil smuggling damages the legitimate economy. Nation states lose tax revenue if their population are buying fuel from smugglers. Source countries may also lose revenue from licit sources of oil if it is stolen, as will the oil companies and legitimate suppliers.<\/p>\n\n\n\n There is no overall figure of the overall cost of oil smuggling to the legitimate economy, but case-by-case estimates provide some indication. For example, in Nigeria losses to the state have been estimated at between $750 million-$1.5 billion and $3.5 billion-$6.2 billion annually in 2003.<\/span>37<\/sup><\/a><\/span> Some government actors claim that in 2014 they lost $14 billion, and more recent figures suggest $4.5 billion in 2021.<\/span>38<\/sup><\/a><\/span> <\/p>\n\n\n\n In the case of Nigeria, the oil theft that underpins oil smuggling is also problematic for the livelihoods of fishers and farmers, because it can lead to an increased risk of spillage and environmental degradation.<\/span>39<\/sup><\/a><\/span> <\/p>\n\n\n\n Security<\/em><\/p>\n\n\n\n Money from oil smuggling can facilitate arms purchases and so sustain conflict by militants and armed groups.<\/span>40<\/sup><\/a><\/span> This is thought to have occurred in the Niger Delta and the South of Thailand.<\/span>41<\/sup><\/a><\/span> Oil smuggling from sanctioned countries sustains sanctioned regimes and undermines the effectiveness of international sanctions measures. <\/p>\n\n\n\n Oil smuggling has been linked to other forms of maritime smuggling too. In Nigeria, for example, oil has been exchanged for drugs and weapons.<\/span>42<\/sup><\/a><\/span> Ralby and Soud suggest that this linkage to drug trafficking goes even deeper, because cocaine producers require gasoline supplies to make their product.<\/span>43<\/sup><\/a><\/span> They argue that fuel is smuggled alongside drugs, as well as gold, and that this income stream can be almost as significant as the drugs itself.<\/p>\n\n\n\n Oil smuggling has been linked to piracy through the theft of oil from tankers at sea.<\/span>44<\/sup><\/a><\/span> and to IUU fishers, who may use illicit oil to fuel their vessels. It has also been linked to human trafficking and slavery. For example, fishing vessels used to smuggle oil smugglers in Southeast Asia have been sometimes been found to employ forced labour onboard.<\/span>45<\/sup><\/a><\/span> In Libya, the networks and actors responsible for oil smuggling have also been implicated in people smuggling activities. drawn between oil smuggling and people smuggling, as often the same actors or networks are involved.<\/p>\n\n\n\n There is no global governance mechanism that controls oil smuggling, nor is there a strong degree of international cooperation to combat the issue. Instead, states have tended to enforce their own regulations with their own resources, which has seen varying national responses with varying degrees of success on a case-by-case basis. Research remains sparse however. Much of the focus has been on the success of the Nigerian government in curtailing oil theft and smuggling. Some of the lessons learnt from this case are generalisable to other contexts and reflect responses to other forms of trafficking.<\/p>\n\n\n\n The Nigerian case demonstrates the importance of national regulation in combating the trade. The Nigerian government has developed strong regulatory mechanisms, such as the requirement of bunkering licenses and inspections of bunkering vessels.<\/span>46<\/sup><\/a><\/span> Under these regulations, no ship carrying crude oil can depart from Nigeria without documentation and the specific authorisation of customs officers. Ship-to-ship transfers are also prohibited outside of approved areas.<\/p>\n\n\n\n With these regulations in place, it is anticipated that it will be easier to spot vessels attempting to circumvent these measures. Even so, ships not following these regulations are rarely prosecuted.<\/span>47<\/sup><\/a><\/span> Even where prosecutions do occur, these do not impact on criminal networks and corrupt activities that facilitate the trade.<\/span>48<\/sup><\/a><\/span> <\/p>\n\n\n\n Nigeria has also developed its enforcement capacities. Naval patrols and increased surveillance in ports and at sea have had a demonstrable impact on intercepting and reducing oil smuggling.<\/span>49<\/sup><\/a><\/span> Nigeria has also deployed a Joint Task Force which specifically targets oil theft and smuggling.<\/span>50<\/sup><\/a><\/span> Even so, monitoring and capacity challenges remain.<\/span>51<\/sup><\/a><\/span> A lack of international cooperation has exacerbated these problems, with calls for countries in the Gulf of Guinea improve information exchange to better monitor crude oil vessels.<\/span>52<\/sup><\/a><\/span> <\/p>\n\n\n\n Coordination between enforcement agencies is also important. The signing of a memorandum of understanding between the Nigerian Maritime Administration and Safety Agency, and the Nigerian Navy has been viewed as an important first step towards tacking oil theft and smuggling effectively.<\/span>53<\/sup><\/a><\/span> However, coordination in practice continues to be hampered by duplication and ongoing rivalries between departments and agencies. Even so, Stable Seas argue that improved interagency coordination has contributed to a 13 per cent decrease in smuggled petroleum products from 2018 to 2019.<\/span>54<\/sup><\/a><\/span><\/p>\n\n\n\n Other responses have focused on land, including the use of private security guards around vulnerable areas, educating communities about the problems of oil smuggling, providing alternative livelihood opportunities, and amnesty programmes. As of yet, however, there is little evidence on the degree to which these measures have been successful.<\/p>\n\n\n\n Introduction Oil smuggling refers to the transporting illicit forms of oils, fuels and other petrochemical materials across borders. Oil is smuggled for many reasons including tax evasion, sanctions evasion or because it comes from oil theft, piracy and crimes against maritime infrastructures such as oil platforms and pipelines. Smuggled oil can end up in neighbouring ..<\/p>\n
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\n\n\n\nList of references<\/h2>\n","protected":false},"excerpt":{"rendered":"