Geopolitical turmoil, shadow fleet and fire risks challenge global shipping: Allianz

Rising geopolitical tensions, sanctions and shadow fleet activity are complicating an already volatile operating environment for the global shipping industry, according to Allianz Commercial’s Safety and Shipping Review.

The report highlights that while maritime safety has improved — with total vessel losses dropping to a record low of 27 in 2024, down from over 200 annually in the 1990s — new risks are emerging that threaten to offset this progress.

“The relevance of political risk and conflict as a potential cause of maritime loss is increasing with heightened geopolitical tensions,” said Captain Rahul Khanna, global head of marine risk consulting at Allianz Commercial. “Total losses from traditional causes may have reduced over time, but we could be in a position where this positive trend is potentially offset by war and other political-related exposures. As an industry, we are in a better position with regards to traditional risks, but there is a renewed focus on geopolitical risks.”

The review warns that trade disputes — particularly between the U.S. and China — and the rapid growth of the so-called shadow fleet are also reshaping maritime risk. As of mid-April 2025, about 18 per cent of global maritime trade is subject to tariffs, up from four per cent in early March. Meanwhile, around 17 per cent of the global tanker fleet is believed to be trading Russian oil through the shadow fleet.

“Although recent sanctions are making it harder for these vessels to trade, the shadow fleet continues to pose a serious risk to maritime safety and the environment, as many are likely to be older vessels that are poorly maintained and inadequately insured. In case of an oil spill involving a shadow fleet tanker, cleanup costs could be as much as US$1.6bn,” said Justus Heinrich, global product leader, Marine Hull, Allianz Commercial.

The report also flags persistent risks tied to fires on large vessels, often linked to mis-declared cargo, including lithium-ion batteries. There were 250 fire incidents in 2024 — a 10-year high — with nearly one-third involving container, cargo or ro-ro vessels.

“There is little doubt the shipping industry is becoming more resilient against the risks associated with large vessels, although we can by no means say they are under control,” said Khanna. “However, only 27 total losses during 2024 underlines the positive trend. To put this into perspective: there are over 100,000 ships (100GT+) in the global fleet. However, uncertainty and multiple risks persist. Cyber-attacks and GPS interferences are increasing. Ceasefires have raised hopes, but the Red Sea security threat and supply chain disruption will likely remain. Meanwhile, the green transition requires much work. The coming years will be decisive and will determine the path of the sector and global trade.”