Ships are faking their locations to engage in illicit activity — and rising numbers appear to be doing so to trade goods that are likely to be worth billions of dollars. 

So-called “dark vessels” shipping Russian Oil in a suspected evasion of the G7’s $60 a barrel price cap, tankers going under-the-radar in Venezuelan waters, and cargo ships allegedly smuggling grain from Ukraine are being uncovered by satellite technology that can identify when vessels report a false location.

Large ships have to be fitted with automatic identification systems (AIS) and must broadcast their locations to prevent collisions, per International Maritime Organization requirements.

But some are switching off their location transponders, or engaging in AIS “spoofing,” where a vessel reports that it is in one location but is actually in another — possibly hundreds of miles away.

Data from maritime technology company Windward showed a rise of 12% in location manipulation among oil tankers and ships carrying dry cargo such as grain for the first half of 2023 when compared to the same period last year, and an 82% increase on the first half of 2021.

Developments in technology are making it easier to track this kind of tampering, while new efforts to make ships’ locations public is shining a light on such activities, according to John Lusk, CEO of Spire Maritime, an analytics company that provides data to governments and private companies.

“We’re starting to see even more focus and visibility on the maritime industry because of the sanctions,” Lusk told Cnbc by video call, referring to the G7’s sanctions against Russia, with the EU’s latest measures barring those vessels that have turned off or spoofed their AIS from entering ports. “Because of dark vessels, a lot of the illegal shipping is starting to increase,” he said.

When contacted by CNBC to ask how many such vessels have been turned away from European ports following the latest sanctions, an EU spokesperson said such information “is not for public disclosure.” “Member States inform each other and the Commission about refusals of a port access call,” the spokesperson said via email.

“When you have black markets where they’re blatantly breaking the law, whether that’s breaking constraints, whether it’s doing things that are going into EEZs [exclusive economic zones] in fishing, whether it’s shipping products under the radar, there’s just a lot of things now that are more visible, and a lot more recognition in terms of how that’s impacting the global economy,” Lusk said.

The G7 capped Russian oil sales at $60 a barrel to constrain revenues the Kremlin can make from the commodity, but according to Ami Daniel, co-founder and CEO of Windward, the illicit movement of Russian oil could be worth tens of billions of dollars.

Over the past year, Windward’s technology identified more than 1,100 tankers associated with Russia that went dark by switching off or manipulating their AIS, a Windward spokesperson told CNBC by email.

“It’s millions of barrels of oil,” Daniel told CNBC by video call. For example, “500 vessels could be [carrying] 800 million barrels. Then multiply that by the price of oil — let’s call it $60. Sounds to me like 48 billion bucks,” he said.

In an online article, Windward said its data showed the number of dark ship-to-ship oil tanker transfers had increased in the Alboran Sea north of Morocco since Russia’s full-scale invasion of Ukraine, which it said suggested a smuggling operation. Such transfers allow one vessel to take oil from another without investigating the oil’s purchase price, and can also mask the commodity’s origin.

Windward also identified a “Russian grain drain” that appeared to show a cargo ship carrying grain “engaging in a dark activity” in the Kerch Strait — the body of water connecting the Azov Sea that has Russian and Ukrainian boundaries — to the Black Sea. Two cargo vessels left Kerch to deliver grain to Morocco and the Arabian Gulf, Windward said.

Spire, meanwhile, identified and tracked 50 very large crude carriers that it said covered up their whereabouts to ship oil from Venezuela.

The U.S. has sanctions against Venezuela, but Spire estimated that 108 million barrels of oil — worth around $8 billion in mid-July, when the company published its tracking data — were moved from the South American country to East Asia between Nov. 1 last year and June 29.

Tankers manipulating the location they transmitted most commonly appeared to be in waters around the oil fields of Angola — but Spire’s data showed their true positions to be across the South Atlantic Ocean in Venezuela’s EEZ.

Vessels then reported an accurate location once they sailed close to South Africa’s Cape of Good Hope, with China and Malaysia their most likely destinations, the company added. Data also showed the draft of the vessels changed, suggesting cargo had been unloaded, Spire said.

As technology has developed, it has become relatively easy to tell whether a ship has turned off its AIS, according to Iain Goodridge, Spire’s senior director of radio frequency geolocation products.

“Let’s say you’re a good-sized oil tanker, and you turn off your AIS. You’re going to hear about it not only from probably your ship owners, your shipbrokers, you’re going to hear about it from the insurance company … they’re going to know that it was off. So that’s definitely moved that focus into, okay, I’m now going to manipulate that signal,” he told CNBC by video call.

This can be done in a number of ways, a Spire spokesperson told CNBC by email. These include switching off the AIS transponder for a period of time; by adding a device between the global navigation satellite system (GNSS) data and the transponder to suggest the vessel is on one route when it’s actually sailing in a different direction; or via a software hack that has the transponder report a latitude and longitude that does not change despite the vessel moving.

The spoofing technology is “almost plug and play,” Goodridge said, “It’s similar to, you know, you can go online and buy GPS jammers for your car … it is that accessible,” he added.

OFAC, the U.S. Treasury Department body that administers and enforces sanctions, issued an alert in April about a “possible evasion of the Russian oil price cap,” warning U.S. companies such as marine insurers that vessels they cover could be using “deceptive practices” like AIS spoofing to hide their presence at Russian ports such as Kozmino. OFAC recommended firms use maritime intelligence providers “to improve detection of AIS manipulation.”

Christopher Swift, a partner and member of U.S. law firm Foley & Lardner’s government enforcement defense and investigations practice, called AIS spoofing “highly suspect.”

“If you’re in the insurance industry, and you’re not paying attention to this, you really need to start paying attention,” Swift told CNBC by video call.

In May, the Treasury Department said the oil price cap had achieved both of its aims: to maintain the supply of Russian oil but restrict its revenues. Swift expects the U.S. government to investigate further, although he added that enforcement “tends to lag behind the newest sanctions [and] circumvention strategies,” he told CNBC by email.

On Friday Sept. 8, the U.S. Justice Department said it had seized nearly a million barrels of Iranian crude oil that violated sanctions, sentencing vessel owner Suez Rajan Limited to three years’ corporate probation and fining the company almost $2.5 million.

“Participants in the scheme attempted to disguise the origin of the oil using ship-to-ship transfers, false automatic identification system reporting, falsified documents and other means,” the DOJ said in an online release.

This might pave the way for Russian sanctions evasions to be punished, Swift said. “Recent DOJ criminal cases and civil forfeiture actions involving shipping companies carrying illicit Iranian oil shows how the U.S. Government might react to AIS spoofing and Russian oil smuggling in the future,” Swift told CNBC.

CNBC has contacted the U.S. Treasury Department for comment.

— CNBC’s Silvia Amaro and Ruxandra Iordache contributed to this report.