US Allows Sanctioned Oil Tankers to Begin Legitimization Process
The Trump administration has announced plans to allow some sanctioned oil tankers to begin a process that could return them to legitimate crude shipping, as the administration looks to expand tanker capacity and ease pressure on energy prices.
According to Bloomberg, US Energy Secretary Chris Wright said investors could buy and refurbish idled, sanctioned vessels before using them to transport non-sanctioned oil. This move comes as the administration seeks to reduce energy prices amid the prolonged closure of the Strait of Hormuz. Brent crude settled 0.48% lower on Monday at $109.30 per barrel, while West Texas Intermediate fell 0.61% to $98.42, according to Bloomberg.
Russia’s Shadow Fleet: A Covert Military Asset
Russia has relied on its shadow fleet to evade sanctions and keep oil revenues flowing into the Kremlin’s war economy. The vessels have helped transport sanctioned oil and sustain revenue streams used to finance Russia’s war against Ukraine. “We’re going to move some of the ships from what I call the ‘bad-guy fleet’ to the ‘good-guy fleet,’” Wright stated. “They will not carry sanctioned oil any more.”
Wright estimated that about 1,600 tankers currently operate as part of Russia’s shadow fleet, adding that dozens or potentially hundreds could eventually return to legitimate trade, Bloomberg wrote.
Realistic Return: Only 24 Vessels Sanctioned by US Treasury Department
However, shipping analytics firm Kpler estimated that only 24 of roughly 160 vessels sanctioned by the US Treasury Department’s Office of Foreign Assets Control could realistically return to mainstream trade once vessel age and ownership restrictions are taken into account. “With war risk, rather than vessel availability alone, driving freight costs in the Middle East Gulf, sanctions relief risks delivering limited commercial benefits while weakening geopolitical leverage,” Kpler analysts wrote.
Rejection of Lifting Restrictions
Wright rejected suggestions that the process amounted to lifting restrictions on vessels that would continue carrying sanctioned oil from Russia, Iran, or other countries targeted by US measures. “We are converting dark tankers to legitimate tankers,” Wright stated.
French Scrutiny: Investigation into Captain of DF Peak Tanker
Meanwhile, France has been stepping up scrutiny of vessels linked to Russia’s shadow fleet. On October 13, French prosecutors opened a criminal investigation into the captain of the DF Peak tanker after an inspection found irregularities with its claimed Beninese flag, with authorities also examining the vessel’s ownership and operating structure.
Discuss this article:
Original Article: Trump Administration Moves to Bring Sanctioned Tankers Back Into Legal Shipping — UNITED24 Media — United24Media