US considers lifting sanctions on Russian shadow fleet vessels – Reuters

Ivan Diakonov - 15 October, 04:57

Vessels belonging to Russia's shadow fleet. Photo: Ukrainska Pravda

US President Donald Trump's administration is exploring the possibility of lifting sanctions on vessels belonging to the so-called shadow fleet that have been transporting oil from Russia and Iran, in the hope of bringing down record-high global shipping rates, which have reached record highs.

Source: Reuters

Quote: "The new talks centre on the United States potentially allowing 'legal oil' to flow on previously sanctioned vessels, the US official said. ⁠That means crude or petroleum products not sanctioned by Washington rather than Russian and Iranian oil, which are under punitive measures."

Details: According to a source cited by Reuters, the main aim of such measures is to increase exports of oil and petroleum products from the Persian Gulf.

If the proposal is approved, companies wishing to use these tankers would have to obtain individual licences from the US Department of the Treasury.

US Energy Secretary Chris Wright confirmed in a video address to the World Petroleum Congress in Riyadh that the administration is considering easing restrictions on the shadow fleet. He stressed that the surge in freight rates had significantly reduced demand for US crude oil.

The US Department of Energy said that any move to ease sanctions on the shadow fleet would not help Russia transport oil or petroleum products.

Analysts at Energy Aspects are sceptical about the potential impact of such a move. They note that shadow fleet tankers are old and technically worn out, and would add little new capacity, as most have already been transporting oil continuously over the past three months.

Experts suggest that easing the restrictions "could make a small number of additional tankers available for certain [Strait of] Hormuz shuttle runs".

In addition, maritime industry representatives stress that US measures are unlikely to lead to a significant reduction in freight rates, as ship insurers would still have to comply with EU and UK rules.

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