US Opens Approval Route for Sanctioned Tankers to Rejoin Legal Oil Trades
The US is opening a route for investors to buy and refurbish sanctioned oil tankers for use carrying non-sanctioned crude, according to remarks by Energy Secretary Chris Wright in New York on 19 October. This move aims to convert vessels from the “bad-guy fleet” to the “good-guy fleet,” as Wright put it.
Wright estimated the global dark fleet at about 1,600 vessels that have transported Venezuelan, Iranian and Russian oil. He said dozens to hundreds of tankers could ultimately return to legitimate trades, although the process would take time. The initiative does not amount to a blanket removal of sanctions; instead, it involves an approval process for individual vessels.
Approval Process for Sanctioned Tankers
A prospective buyer must obtain approval from the US Treasury Department’s Office of Foreign Assets Control (OFAC). OFAC can authorise a transaction and consider removing sanctions from an individual vessel on a case-by-case basis when a legitimate buyer intends to return it to lawful commercial service. Specific OFAC licences apply to individual applicants and transactions rather than providing general authorisation for the sanctioned fleet.
Targeting Vessels Involved in Sanctioned Trades
The Treasury Department has continued to target vessels involved in sanctioned trades. On 8 October, it sanctioned another 17 vessels over their involvement in transporting Iranian crude, petroleum products, and petrochemicals. OFAC administers US economic sanctions and can issue specific licences for transactions that would otherwise be prohibited.
As the US continues to target vessels involved in sanctioned trades, the opening of this approval route aims to provide a pathway for sanctioned tankers to rejoin legal oil trades. The initiative’s success will depend on the ability of prospective buyers to obtain OFAC approval and demonstrate their commitment to operating these vessels legally.
Original Article: US opens approval route for sanctioned tankers to rejoin legal oil trades — Portnews