US to Repurpose Sanctioned Oil Tankers for Legitimate Crude Transport, Energy Secretary Announces

The administration of US President Donald Trump is initiating a process to allow oil tankers currently under sanctions to legitimately ship crude oil, according to Energy Secretary Chris Wright. Speaking at a Citadel Securities event in New York on Monday, Mr. Wright explained that this initiative will involve investors acquiring and refurbishing idled sanctioned tankers. These vessels will then be utilized for the transportation of legal oil. "We’re going to move some of the ships from what I call the ‘bad-guy fleet’ to the ‘good-guy fleet,’" Mr. Wright stated. "They will not carry sanctioned oil any more." He noted that approximately 1,600 tankers are part of the "dark fleet," and that dozens or even hundreds could be integrated into the legitimate shipping fleet. This move represents the latest effort by the Trump administration to mitigate rising energy prices, which have surged due to the ongoing closure of the Strait of Hormuz. Brent crude, the global oil benchmark, closed 0.48 per cent lower on Monday at $109.3 per barrel, while West Texas Intermediate, tracking US crude, fell 0.61 per cent to $98.42. Analytics firm Kpler suggested that easing sanctions on this shadow fleet would have a minimal impact on record freight rates. Kpler estimated that only about 24 of the roughly 160 vessels sanctioned by the Treasury Department's Office of Foreign Assets Control would be eligible for mainstream trade, considering their age and ownership restrictions. Analysts from Kpler wrote, “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.” Mr. Wright refuted claims that this process would amount to lifting penalties on ships that might transport crude from countries like Russia or Iran, which are subject to US sanctions. "We are converting dark tankers to legitimate tankers," he asserted.