US Sanctions Relief on 'Dark Fleet' Unlikely to Resolve Tanker Crisis Amid Geopolitical Risks

The United States' decision to lift sanctions on vessels belonging to the "dark fleet" or shadow fleet is not anticipated to resolve the ongoing tanker crisis impacting oil markets. This is largely due to the continued conflict involving Iran and the persistent reluctance of ship owners to navigate the Strait of Hormuz, citing concerns for crew safety.

Salih Yilmaz, a senior industry analyst specializing in energy at Bloomberg Intelligence, commented that while the US move "could provide some relief, particularly around the Arabian Gulf where tanker availability has been strained, but I wouldn't expect it to solve the current tanker crisis." The administration of Donald Trump recently authorized the sale of sanctioned oil tankers, aiming to permit these vessels to legitimately transport crude oil.

Mr. Yilmaz further explained that "a large share of sanctioned vessels appears to be already operating in Russian, Iranian or other restricted trades rather than sitting idle, so sanctions relief would mainly redistribute existing capacity into mainstream markets." A significant impediment remains the apprehension of ship owners regarding operations in the Arabian Gulf due to ongoing attacks on tankers, which have resulted in fatalities and injuries among crew members.

According to the International Maritime Organisation, there have been 120 confirmed attacks on ships as of October 22, with 22 seafarer fatalities since the conflict began in February. The risks associated with sailing through the Strait of Hormuz have led tanker owners to offer substantial compensation, with reports from the Financial Times indicating payments as high as $100,000 per month to ship's captains, plus a $50,000 bonus per trip.

"The bigger constraint today is the risk of operating around Hormuz. Owners are demanding very high compensation for exposing vessels and crews to attacks," Mr. Yilmaz stated. US Energy Secretary Chris Wright indicated that the US government is collaborating with investors to acquire, refurbish, and utilize idled sanctioned tankers for transporting non-sanctioned oil, referring to the transition as moving ships from the 'bad-guy fleet' to the 'good-guy fleet'.

Wanying Zhang, a freight analyst at Vortexa, echoed the skepticism, suggesting that "any easing of OFAC [Office of Foreign Assets Control] sanctions is unlikely to trigger a significant return of sanctioned tankers to mainstream trades." She added that "a substantial share of OFAC sanctioned tankers remain subject to UK or EU sanctions, which could continue to restrict their access to European trades even if US restrictions are lifted." The Office of Foreign Assets Control (OFAC) is a division of the US Treasury Department responsible for enforcing economic and trade sanctions.

Furthermore, the advanced age of many of these vessels presents another hurdle. Approximately 70 percent of OFAC-listed tankers are at least 20 years old, potentially delaying their return to mainstream trade due to maintenance, inspection, insurance, and commercial requirements, limiting their acceptance by mainstream charterers.