Trump Weighs Lifting Shadow Fleet Sanctions as Tanker Rates Soar

The proposed change would ease sanctions on certain shadow-fleet vessels, but only for shipments of oil and petroleum products that Washington has not sanctioned. The administration says this could increase shipping capacity, move more crude and refined products from the Gulf, and reduce record-high freight costs that are hurting demand for US crude.

For example, a company could apply to the US Treasury for permission to use a previously sanctioned tanker to carry permitted oil. Russian and Iranian oil would remain under punitive measures. The proposal follows Trump’s temporary lifting of sanctions on Russian diesel, which drew criticism from Ukraine, European countries, and Republican senators.

The practical impact remains uncertain. Energy Aspects said the policy would probably add little mainstream tanker capacity because many sanctioned ships are already trading. Maritime sources also said EU and UK insurance rules could limit any broad fall in freight rates. The talks could nevertheless enable some extra Hormuz shuttle voyages.

A shadow fleet generally means tankers that operate with limited transparency or outside the mainstream shipping system. They may have unclear ownership, change flags, use unusual trading arrangements, or rely on insurance and services that are less exposed to Western sanctions. The article describes many of these vessels as old and not well maintained.

These ships have transported oil and petroleum products from Russia, Iran, and Venezuela. Their value is that they can keep cargo moving when mainstream shipowners, insurers, banks, or ports avoid sanctioned trades. In the article, however, the administration is considering allowing them to carry only “legal oil,” meaning cargo not sanctioned by Washington.

The article does not provide a formal definition or explain every method used by shadow fleets. Their future role is also uncertain. Even if Washington permits some voyages, EU and UK insurance rules may still restrict the vessels, limiting their usefulness and preventing a broad reduction in freight rates.

The administration’s phrase “legal oil” separates the cargo from the vessel’s history. A tanker may have been sanctioned because of links to Russian or Venezuelan trade, yet Washington is considering allowing it to carry a different shipment that is not itself prohibited. The distinction matters because the plan is presented as a shipping-capacity measure.

For example, a company could apply to the US Treasury to use a sanctioned tanker for permitted crude or refined products from the Gulf. The ship would not automatically be cleared to transport Russian or Iranian oil. Those cargoes remain under US punitive measures, according to the article.

This approach could make some additional tankers available without formally removing sanctions from restricted oil. But it may not transform the market. Energy Aspects said most sanctioned tankers had already been trading recently, while maritime sources warned that EU and UK insurance rules would still constrain their operations. The article does not specify approval criteria or timelines.

More available tankers normally give oil shippers more transport options. That can reduce competition for vessels, lower freight rates, and make it easier for crude and refined products to reach buyers. Lower shipping costs can support oil demand, including demand for US crude that has been weakened by record freight rates.

The article gives a specific possible route: newly permitted ships could perform additional Strait of Hormuz shuttle runs between Iran and Oman. They could also help move more products and crude from the Gulf. Companies would need permission from the US Treasury, and the cargo would have to be legal under US sanctions.

The likely effect is limited rather than dramatic. Energy Aspects said easing sanctions would not greatly change freight rates because many sanctioned tankers were already trading. Maritime sources added that EU and UK insurance rules would remain in force. Therefore, shipments might increase modestly, while global freight and fuel prices may remain elevated.

Several decision-makers shape whether a sanctioned tanker can operate. The US Treasury would review applications from companies seeking to use the vessels. The Department of Energy and the White House also influence policy discussions. Shipping companies must decide whether a voyage is worth the legal, financial, and operational risk, while insurers decide whether they can provide coverage.

A US approval would not override every other rule. The article says companies would apply to Treasury to use previously sanctioned vessels, but maritime sources warned that insurers remain bound by European Union and United Kingdom regulations. Those rules could prevent coverage for a voyage even if Washington permits it.

That creates a practical bottleneck. A tanker may be technically available but commercially unusable without insurance. The result could be some extra Hormuz shuttle capacity rather than a broad expansion of the fleet. The article therefore suggests US policy alone may not produce a major fall in freight rates or fuel prices.

The article explains why tankers matter but does not quantify their share of world oil trade. A widely used industry estimate is that roughly four-fifths of internationally traded oil moves by sea, making tanker availability important to global supply routes and prices. The exact share changes depending on whether the measure counts crude, refined products, or all oil movements.

The article also gives no fleet totals. Outside this source, industry estimates often place the shadow fleet at roughly 600 to 1,000 tankers, depending on whether analysts count only sanctioned vessels or all ships operating with limited transparency. The mainstream oil-tanker fleet numbers several thousand vessels, so the shadow fleet is a minority but significant segment.

These estimates are not directly comparable or fixed. Ships enter and leave shadow-fleet classifications, and definitions differ. The article’s concrete point is narrower: many sanctioned vessels had already traded during the previous three months, so lifting restrictions may add little new capacity.

Sanctions control market access by restricting particular oil, vessels, companies, or services. When a tanker is sanctioned, mainstream owners, banks, and insurers may avoid it. Fewer acceptable ships remain for certain routes, so available capacity becomes more expensive. Those higher freight costs can reduce demand for cargoes that must travel long distances.

The article gives this mechanism directly. Wars in Iran and Ukraine pushed tanker rates to records, making US crude harder for Asian refiners to buy. Those refiners then sought alternatives from the Middle East and Latin America. Allowing some sanctioned ships to carry legal oil could add vessels for Gulf movements and certain Hormuz shuttle runs.

The system has several limits. A US Treasury approval may not overcome EU and UK insurance rules. Also, Energy Aspects said many sanctioned tankers were already trading, so lifting restrictions may add little capacity. Freight rates could therefore remain high, while sanctions continue shaping which oil reaches which buyers.