The global fleet of vessels operating under fraudulent flags continued to expand in the second quarter of 2026, despite a quarterly decline in the number of internationally trading tankers detected using such registries, according to Windward.

Windward’s analysis identified 275 internationally trading tankers broadcasting the flag of a fraudulent registry during Q2 2026, down from 290 in the previous quarter. However, the IMO database lists 580 vessels carrying fraudulent flags, compared with 550 at the end of Q1 and 470 at the end of 2025.

The figures indicate that vessels may be moving away from specific registries as those flags attract regulatory attention, while the overall population of falsely flagged ships continues to increase.

Windward linked the trend primarily to sanctions evasion, estimating that around 90% of tankers using fraudulent registries are subject to Western sanctions. By broadcasting an unauthorised flag, a tanker may seek to appear less exposed to enforcement scrutiny when dealing with ports, insurers, financial counterparties and other maritime service providers.

Activity connected with Russia and Iran was identified as a major factor during 2026. Russia-linked tankers falsely claimed Syrian and Myanmar flags for the first time during the second quarter. Neither Syria nor Myanmar operates an international ship registry, meaning vessels broadcasting those flags are doing so fraudulently.

At the same time, approximately 60 tankers transferred from fraudulent registries to the Russian flag during the first half of 2026. Windward said this reflected pressure on some fraudulent registries after regulators and maritime industry organisations publicly documented their activities.

False flagging is also widespread in the Iran trade. Of approximately 430 tankers currently active in that trade, around 62% are falsely flagged and 87% are sanctioned. Windward said the overlap demonstrates the role false-flag operations play in supporting Iranian oil exports amid continuing US, UK and EU sanctions.

The practice creates compliance risks across shipping and financial services. Banks and trade finance teams may receive an inaccurate picture of a vessel’s sanctions exposure if identity screening relies on a fraudulent declared flag. Transactions initially cleared through screening could subsequently be found to involve a sanctioned vessel using an unauthorised identity.

Marine insurers and P&I clubs may similarly face discrepancies between a vessel’s declared flag and its actual identity, affecting underwriting, risk assessment and claims decisions. Charterers and commodity traders conducting vessel due diligence may also be unable to establish reliable ownership, operational and sanctions histories.

Port authorities and marine service providers face comparable challenges when deciding whether to admit or transact with a vessel. Enforcement authorities have responded by seizing stateless vessels and publicly identifying fraudulent registries. Q2 enforcement actions included vessels operating under fabricated Syrian and Myanmar flags.

Windward expects the composition of the false-flagged fleet to keep changing as registries are identified and disavowed. With sanctions pressure on Russia and Iran remaining strong, it assessed that demand for false-flag broadcasts is unlikely to ease in the near term.