Who keeps the Russian shadow fleet afloat?

Summary

Brussels Playbook Podcast – Episode Summary
Episode Title: Who keeps the Russian shadow fleet afloat?
Host: Zoya Sheftalovich
Co-host: Sarah Wheaton
Date: June 2, 2026
Duration: ~15 minutes

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Episode Overview

Today’s Brussels Playbook Podcast dives deep into three critical EU stories: the challenge of targeting Russia’s shadow shipping fleet and the insurance mechanisms keeping it active, Hungary’s tense reform struggle following regime change, and Europe’s preparations as Ebola outbreaks intensify in Africa. The show features a clear, conversational breakdown from Zoya Sheftalovich and Sarah Wheaton, providing insight into each story’s moving parts and broader implications for EU politics and policy.

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1. Targeting Russia’s Shadow Fleet: The Insurance Web

Main Segment: 00:00–05:57

Key Points:

• Ongoing Sanctions: The EU is preparing a new package of sanctions aimed at disrupting Russia’s so-called “shadow fleet” — vessels that operate in legal gray areas, sometimes with fake papers and sketchy insurance. (00:52)
• Insurance Loopholes: Many of these shadow fleet ships rely on P&I (Protection and Indemnity) insurance, usually required for covering events like oil spills or accidents. Western companies can't directly insure Russian ships due to sanctions, so Russia is routing insurance through workaround methods—sometimes with surprising European involvement. (01:59)
  • “The key thing is this P&I insurance…The Russian vessels have trouble getting insurance because a lot of that insurance can't legally be provided… But what they're doing is getting insurance that's being underwritten by the Russian central bank, often from a country that's in Africa, a fake kind of insurance provider.” — Zoya Sheftalovich (02:02)
• European Complicity: Analysis by companies like Deft9 and other experts suggest European financial firms are inadvertently underwriting Russian-linked insurance, purchased as part of mixed insurance packages. (03:12)
  • “It’s not actually possible for Russia to underwrite all this insurance… So Russia is packaging up this insurance…on-selling it to European banks or insurers that are buying it kind of unwittingly.” — Zoya Sheftalovich (03:34)
• Sanctions Debate: EU leaders are currently negotiating the 21st package of sanctions, expected to specifically target the insurance and financial chains enabling the shadow fleet. However, a proposed maritime service ban has been dropped due to concerns from certain member states. (04:25)
  • “That looks like it's been parked because there's some objection from some countries that rely on those services and are concerned about their economies.” — Zoya Sheftalovich (05:00)

Notable Moment:

• The term “confessionals” is used to describe member states’ feedback sessions to the Commission about proposed sanctions:
  • “Last week we had the confessionals, where countries tell the Commission what they think about the various measures.” — Zoya Sheftalovich (05:57)

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2. Hungary’s Reform Crunch: Power Shifts and Political Deadlock

Segment: 06:06–09:33

Key Points:

• Commission Visit: EU Commissioner Michael McGrath visits Hungary to meet with Justice Minister Marta Gorog, marking the first face-to-face since last week’s tenuous deal on Hungary’s EU funds. (06:12–06:26)
• Conditional Deal: A high-profile agreement was announced to unlock €16.4 billion in EU recovery and withheld funds—contingent on Hungary enacting rapid reforms in the rule of law, anti-corruption, and public procurement. Deadline: August 31st. (06:58)
  • “It’s really, really a fast turnaround time for any piece of legislation anywhere. But it’s particularly a fast turnaround time when you consider there were 16 years where Viktor Orban was passing this legislation and undoing it in a few months is quite the task.” — Zoya Sheftalovich (07:32)
• Stubborn Loyalists: Magyar’s government must overcome the persistence of Orban-era loyalists, notably President Thomas Sulyak, who resisted resignation demands. Magyar is threatening constitutional amendments to push through reforms. (08:12)
• Catch-22 for Rule of Law:
  • "It’s extremely difficult to restore the rule of law without breaking the law." — Prof. John Morrigan, quoted by Zoya Sheftalovich (08:52)
• Next Steps: Reforms must pass parliament and be enacted for the EU to release funds. The process is fraught with legal and political challenges.

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3. Ebola on Europe’s Radar: Preparedness and Caution

Segment: 09:33–13:34

Key Points:

• Central African Outbreak: Growing Ebola crisis in the Democratic Republic of Congo and Uganda prompts heightened EU vigilance, even as risk to Europe remains officially “very low.” (10:16)
  • “The ECDC, this disease agency, is giving daily epidemiological updates and said it's ready to even send experts into the region.” — Sarah Wheaton (10:40)
• Recent Scares: Suspected Ebola cases in Italy (Northern Italy, Sardinia) ultimately tested negative, but stress test national response: airport checks, isolation, and contact tracing. (11:14)
• Travel Restrictions: Italy tightens screening on arrivals from DRC and Uganda; other countries, including Belgium (with direct flights to Congo), monitor closely but focus on balanced responses to maintain aid links. (11:51)
• Coordination Efforts:
  • Cypriot presidency brokers coordination among EU health ministers.
  • Upcoming meetings on June 5 (video conference) and June 16 (Health Council) to evaluate and update response.
  • The EU’s crisis response mechanism (IPCR) is monitoring but not fully activated. (12:28)

Memorable Exchange:

• “So you’re associating me with a disease where you bleed out of your eyeballs. Thanks.” — Sarah Wheaton (10:12)

• “You’ve got to have checks at the airports, isolation, lab testing, contact tracing—there’s a phrase I thought I wouldn’t hear again for a while after Covid.” — Zoya Sheftalovich (11:31)

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4. Lighter Moments & Tidbits

Segment: 13:34–14:58

• Italy’s Republic Day: Brief nod to June 2nd’s significance: the 1946 referendum abolishing the monarchy. Military parade and celebrations in Italy, with the hosts swapping quips over Italian wine and food. (14:01)
• Birthday Shout-out: Recognition of Maria Temasek, spokesperson for European Council President Antonio Costa. Callout for listeners to submit birthdays for future pods. (14:19)

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Key Quotes & Timestamps

• “Sometimes that insurance is being underwritten by European financial firms.” — Zoya Sheftalovich (02:58)
• “This was the real mind-boggling thing from your story…Europe is sanctioning these Russian ships on the one hand, but its companies are helping them.” — Sarah Wheaton (03:12)
• “It’s extremely difficult to restore the rule of law without breaking the law.” (Prof. John Morrigan, quoted by Zoya Sheftalovich, 08:52)
• “One traveler can be enough to trigger the whole chain of all those things in Europe.” — Zoya Sheftalovich (11:45)

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Conclusion

Packed with sharp reporting and snappy exchanges, this episode of the Brussels Playbook Podcast lays bare the hidden complexities of EU sanctions policy, the political drama in Hungary as Brussels mulls over billions in recovery funds, and the renewed urgency around global health vigilance with the Ebola outbreak. It closes with a blend of institutional updates and European flavor, offering an essential, insightful listen for anyone tracking EU politics and policy.

Transcript

[A]

Good morning. It's Tuesday, June 2nd, and this is the Brussels Playbook podcast. The vibe in Brussels today is murky as the EU prepares to target Russia's shadow fleet again. Meanwhile, experts are warning that the real weak spot might be the insurance that keeps those ships afloat. Also on the pod, Hungary's reform fight is getting messy with Commissioner Michael McGrath arriving in Budapest as Peter Magyar races to pass reforms. And Europe is on Ebola watch, with EU health ministers preparing to coordinate as the outbreak in Central Africa grows. I'm Zora Shastilovich and with me today is Sarah Wheaton. Hey, Sarah.

[B]

Hey, Zoya.

[A]

You know, last time I was really happy to have you because of your food expertise. Now I'm happy to have you because of your health expertise.

[B]

I mean, I'm not a doctor, but I, I write about them sometimes.

[A]

It's basically almost the same thing. The first story we're going to talk about today is one that is close to my heart because I've been working on this one for a while now. The EU is currently working on first package of sanctions to target Russia in response to the full scale invasion of Ukraine. And one of the big elements of that package is expected to hit Russia's shadow fleet. Now, these are those ships that operate in murky waters. They sometimes carry legal cargo, sometimes illegal cargo. They have dodgy insurance, dodgy papers, dodgy everything. And they've been suspected to be behind some pretty significant incidents in the Baltic Sea, for instance, with anchor dragging that has taken out some cables. So that's what we're talking about here.

[B]

Well, yeah, and as you were saying, they have a lot of murky backup. And so this next stage of the sanctions fight is not just saying which Russian ship do we blacklist, but actually who is helping to operate the ship in the first place. They need all this backup, port access, fuel crews, managers, paperwork. And your reporting suggests that, you know, one of the really interesting things here is actually the insurance trail.

[A]

Yeah, this is something that I've been honing in on. Now, I'm no insurance expert, Sarah, so, you know, I've had to rely on some big brains for this one. But basically the key thing is this PNI insurance, it's this liability cover so that if there's a ship that causes damage to, for instance, an oil spill, let's say, and that causes damage to the environment, or for instance, what happened in Baltimore, we saw that ship crash into the bridge, you know, all of these sorts of things. Ships have to have insurance so that if something like that happens, which can cost hundreds of millions of dollars to ameliorate. They need to have someone backing them up. Now the Russian vessels have trouble getting insurance because a lot of that insurance can't legally be provided by the classic kind of Western financial companies because if they're carrying sanctioned goods, they're not allowed to provide it. But what they're doing is getting insurance that's being underwritten by the Russian central bank, often from a country that's in Africa, a fake kind of insurance provider. And that is part of what the EU is trying to figure out, how they can find those companies, how they can trace them back and block that insurance from being provided. Especially because, and this is the key thing in my story, sometimes that insurance is being underwritten by European financial firms.

[B]

This was the real mind boggling thing from your story because I mean, okay, Russia doesn't exactly have the money to insure these ships either, but they figured out this incredibly sneaky way that, you know, Europe is, is sanctioning these Russian ships on the one hand, but its companies are, are helping them explain that.

[A]

Yeah, so this is super interesting. I spoke with some analysts who work in this field. Some were from this company called Deft9, which traces the shadow fleet and looks at their financial dealings. Others work in other companies. And basically what they found is it's not actually possible for Russia to essentially underwrite all of this insurance because it's billions and billions of euros, billion, billions of dollars that they have to have on hand to provide this insurance. And so what they surmise is happening, and this was backed up by some of the politicians I've spoken to who are really in the weeds on this, is basically that Russia is packaging up this insurance with some other type of insurance that is legal to provide and on selling it to European banks or European insurers that are buying it kind of unwittingly. And so the key thing here is just being able to track that chain and having the EU really target really precisely those sanctions to stop that from being able to happen.

[B]

So, yeah, I mean, historically, you know, these sanctions have always been actually surprisingly difficult to get through the EU process. What's the latest?

[A]

Yeah, so this is the interesting thing because we know that Hungary has changed hands and that has been key to giving the EU the sense that it can get work done on sanctions, be more ambitious with sanctions. So there's currently negotiations ongoing and we expect that leaders are going to actually address this package of sanctions on their EU leaders summit. The 18th of June is when they're meeting again in Brussels and we've actually one of our colleagues, Gabriel Gavin, has seen a copy of the draft conclusions and they specifically talk about that they need to target in their next sanctions package the things that underpin shadow fleet operations. Now, one of the elements in the 21st package of sanctions that they're discussing right now is this maritime services ban, which we've talked about on the pod before. That's where, you know, ships that actually help these Russian ships refuel or fix stuff if something's broken. There was going to be a ban on providing maritime services to Russian ships. That looks like it's been parked because there's some objection from some countries that rely on those services and that are concerned about the impact on their economies.

[B]

They sunk it.

[A]

Yeah, they sunk it, exactly. Thanks, sir. Boom Tish. But yeah, so it looks like the other stuff though will go ahead particularly focused on this on the banking, on the insurance side, on the financial side. But we'll see what happens. Anyway, the negotiations are ongoing. Last week we had the confessionals which where the countries tell the commission what they think about the various measures and we'll see what comes out the other end.

[B]

I love that drama of the confessionals term,

[A]

Sarah. You know, we've been banging on about the Hungarian election. We just talked about it again, of course, but it's actually a pretty big week on this front because today the Commissioner for Justice and Rule of Law for Europe, Michael McGrath, he's in Budapest to meet Marta Gorog, the country's Justice Minister. And this is the first time since they reached that, you know, deal last week in Brussels.

[B]

Yeah. And so for people listening to the, to the audio podcast, you were doing the finger air quotes thing around deal there. And this was the thing that was announced on Friday when Ursula von der Leyen and Magyar met. And you know, initially there were. There were days of confusion about whether this meeting would even happen. Then on Friday, they did meet and announced the unlocking of 16.4 billion with a B euros. And that includes EU post pandemic recovery funds and EU funding withheld for breaches of law. But again, you know, it was more of a finger quote deal than a deal.

[A]

Yeah, this is the classic kind of fudgy situation that you get sometimes in Brussels. And the reason for it is because Hungary under Magyar has been really trumpeting the fact that it wants to do business with Brussels, it wants this money. It's a key priority for the new government and the Prime Minister is trying to make the changes required, basically There's a bunch of reforms that need to be written. The legislation needs to be done, it needs to be enacted, passed through Parliament and then it needs to go into, into action. And that is a deadline of August 31st for all of that to be done, which is really, really a fast turnaround time for any piece of legislation anywhere. But it's particularly a fast turnaround time when you consider that there were 16 years where Viktor Orban was passing this legislation and undoing it in a few months is quite the task. And these are reforms of Hungary's judiciary, anti corruption safeguards, public procurement laws. Like, it's really significant. And partly the issue is that there are a lot of Orban loyalists that were installed during the previous regime who are still in post and who are standing in the way of a lot of this legislation. So the commission has been pretty cautious and said, look, in theory we will unlock this money, but only if you actually do the changes that you've promised. Yeah.

[B]

And of course, the most significance of these loyalists who, who Magyar is still kind of stuck with is the president. President Thomas Sulyak is an ally of former Prime Minister Orban. And shortly after he won the election, Magyar demanded that sulyak resign by May 31st. That was Sunday. Well, that's coming gone and Sulyak is still there. So now Madir has threatened to amend the country's constitution to get rid of him. He told reporters, quote, we're trying to adopt the necessary legislation as quickly as possible. And yes, there will be talk of

[A]

removing all puppets, but this is exactly what we were talking about last week and something that I wrote about ahead of this meeting that Ursula von der Leyen and Maggie had last week, which is that the problem for Magyar is to unwind a lot of this legislation. He actually has to act in a way that could potentially break the law. And that's something that professor of law and politics told me, John Morrigan. He said that it's extremely difficult to restore the rule of law without breaking the law. So it's this real catch 22, because removing these leaders of courts and things could potentially be in breach of the constitution. And it's really awkward for the commission to be associated with that, considering what it's just gone through with 16 years of Oban.

[B]

Yeah. So this is going to be kind of a delicate dance that Commissioner McGraw has to do during his Hungary visit. You know, rule of law is, is literally his beat.

[A]

Yeah, that's right. And he's going to be meeting with a bunch of Hungarian MPs and ministers. And he's going to assess the reforms that Hungary is proposing to make now. And the next steps are basically once Hungary submits its formal revised recovery plan. This is the money that it wants to get from the EU's Covid recovery funds. That proposal needs to be approved by the commission, endorsed by EU countries, and then adopted. And Brussels hopes that'll be by July. But it's like a lot of steps that Hungary has to get through. Sarah, this is our third story, is the one that I'm really happy to have you on the show for. It's about Ebola.

[B]

So you're associated me with like a disease where you bleed out of your eyesballs. Thanks.

[A]

I'm associating you with the disease that I know very little about, but you are an expert in, as a former health reporter. Look, there's an outbreak that's happening around the world at the moment, not in Europe, we should say it's happening in the Democratic Republic of Congo. And there have also been cases reported in Uganda, but the situation is moving pretty fast. And there are some concerns that this

[B]

could spread beyond Africa to Brussels credit and the eu. Broadly, they're trying to say, look, we're preparing. There's no need to panic. So the European Centre for Disease Control, the EU agency, is still saying that the risk to the general population in Europe is very low, but the continent is stepping up its surveillance. The ecdc, this disease agency, is giving daily epidemiological updates, and it said it's ready to even send experts into the region. It's working with airlines and has issued guidance to EU countries on things like case definitions, testing, and preparedness. It all sounds a bit technical, but this is really the nuts and bolts of prevention.

[A]

Yeah. And the reason why we're talking about it on the podcast is because things are getting closer to Europe now. Last week, there were two suspected Ebola cases in northern Italy, which ended up shown to not be Ebola. And yesterday there was a suspected case in Sardinia, also in Italy, that also seems to be negative. But nonetheless, you know, even negative cases matter because you've got to make sure that the system works. You've got to have checks at the airports, isolation, lab testing, contact tracing. There's a phrase I thought I wouldn't hear again for a while after Covid, but nonetheless. And one traveler can be enough to trigger the whole chain of all of those things in Europe.

[B]

Yeah. So that's why Italy has tightened its own rules. Travelers arriving from the Democratic Republic of Congo And Uganda have to declare if they've been in those countries for the previous 21 days because that's Ebola's incubation period. And here in Belgium, we're also, you know, paying close attention. Brussels has direct daily flights to and from Congo. And Brussels Airlines says it's keeping flights running where possible, and that's crucial so that medical staff supply medication can also get in. But yeah, so Europe is trying to get this balance right of, of reducing the risk, but not completely cutting the region off and preventing it from getting any help.

[A]

Yeah. And at the EU level, Cyprus, which is the country that currently holds the presidency of the Council of the eu, it acts as sort of a broker between EU countries, ministers. It's trying to make sure that capitals are talking to each other and informing each other of what's going on. There's going to be a health ministers meeting by video conference on Friday, this Friday, and they're going to discuss what's happening, what the latest is, and then there's going to be another conversation about this at the Health council, which is happening on June 16, later this month. And plus, the presidency has, it's kind of looking at using the EU's crisis response system. That's the IPCR. It's in monitoring mode, so it hasn't actually triggered the crisis response mechanism, but it's monitoring what's happening to sort of keep information flowing between capitals and the EU institutions.

[B]

And of course, just to bring it full circle back to Hungary. The Health commissioner is of course, Oliver Varjayi, the Orban appointee. This will be a chance for him to show if he's willing to still be a team player.

[A]

I think this is going to be one that we're going to be keeping an eye on in Europe and keeping an eye on on this podcast because it doesn't look like Ebola is going away anytime soon.

[B]

Definitely not.

[A]

Hey, Sarah, since we were just talking about Italy, today is Republic Day. Ciao, Ciao. Indeed. That's. That's it. Anyway, look, the 1946 referendum is what this day commemorates. It's when people went to the polls to abolish the monarchy and establish a democratic republic after the Second World War.

[B]

Yeah. So to celebrate, there's going to be a military parade in Rome and a wreath laying ceremony at the Tomb of the Unknown Soldier. And I know over at the European Parliament last night they were, they were having some festivities as well.

[A]

Ooh, I wonder what they got to eat. And to drink. I hope it was prosecco and pasta.

[B]

I'll take some Chianti.

[A]

Before we go. We've got a birthday shout out. Maria Temasek, who's the spokesperson for the European Council President Antonio Costa, is celebrating today. If you've got a birthday and you want us to include it on the Brussels Playbook podcast, why not send us a voice Note or a WhatsApp, let us know and we might give you a little shout out. So, happy birthday, Maria. And, yeah, you could be next. Folks, that's about it from us today. Please do leave us a rating. Write us a review, Sarah, I've been requesting carrier pigeons.

[B]

Well, what about a telegram?

[A]

Ooh, a telegram. That's a great. We're going to go through all of the means of transporting messages on this show, even if it kills us, folks. Have a lovely day. Bye.

[B]

Arrived at it.