Trump’s Plan to Revive Sanctioned Tankers Faces Tough Sell

The US plan would let blacklisted tankers be sold and rejoin the legitimate oil-shipping fleet. Energy Secretary Chris Wright said the government would “convert” vessels to expand global availability. The proposal does not remove existing sanctions. It is meant to add shipping capacity while oil and fuel prices remain high after war in the Persian Gulf and the Russia-Ukraine conflict.

The mechanism depends on finding eligible vessels and buyers. A tanker would need to move from sanctioned, or “dark,” trading into mainstream commercial operations. Washington has used a narrower version before. The supertanker Kiara M was blacklisted in December for supporting Venezuela’s oil trade, then removed from the list in March after that trade moved into the mainstream.

The broader plan faces major obstacles. Many vessels are old, already contracted, or earning unusually high freight revenue. European and UK sanctions and insurance rules also matter. Analysts therefore expect any return of capacity to be gradual and much smaller than the entire sanctioned fleet.

Sanctioned tankers are ships placed on government blacklists because authorities link them to restricted oil trades or other prohibited support. The article describes them as vessels outside the mainstream fleet. They may still carry oil, but their sanctioned status makes normal traders, banks, insurers, and counterparties less willing to use them.

“Dark fleet” is the industry term used for this less transparent group of vessels. The article uses “dark vessels” for tankers that could potentially return to legitimate trading. The Kiara M provides a clear example. It was blacklisted in December for supporting Venezuela’s oil trade, then deleted from the list in March after Washington moved Caracas’s trade into the mainstream.

The label does not mean every sanctioned tanker is permanently unusable. Some could be rehabilitated if they meet government conditions and find acceptable buyers. Still, age, contracts, insurance, and compliance checks can keep them out of ordinary trade. The article says sanctions relief would not create immediately usable capacity.

Oil Brokerage estimates that 294 sanctioned tankers are free from European Union or United Kingdom penalties. But most are not attractive to mainstream traders. About 70% are more than 20 years old, making them commercially difficult to use. That leaves an estimated 75 tankers of all sizes, including 50 supertankers, as commercially available.

The key distinction is between the sanctioned fleet and usable capacity. A vessel must be free of relevant penalties, available rather than contracted, acceptable to mainstream traders, and able to pass complex compliance checks. Older ships may be technically capable of carrying oil but still be rejected by companies seeking newer, easier-to-insure tonnage.

The 75-vessel estimate is not a guaranteed return to mainstream service. S&P Global’s Rahul Kapoor said the number that could realistically migrate back would be materially smaller than the overall sanctioned fleet. Oil Brokerage also expects any capacity return to happen gradually, not immediately.

Tanker owners may keep operating their ships because freight rates have surged. A vessel earns money each time it transports oil, and current Middle East routes can be extraordinarily profitable. The article says a supertanker crossing the Strait of Hormuz can earn as much as $40 million per trip. That income can outweigh the appeal of selling the ship.

The comparison is striking. A 10-year-old supertanker cost about $190 million in early October, according to Clarksons data. A single Hormuz voyage could therefore generate a very large share of that purchase price, although the article does not say that the entire freight payment becomes profit. Existing contracts can also prevent immediate sale or redirect the vessel.

This creates a weak incentive to participate in the US plan. Owners would need to give up valuable employment, complete compliance checks, and find buyers. Even with higher resale values, the article says soaring freight rates continue motivating owners to keep their vessels operating.

A small return of sanctioned tankers would add only limited shipping capacity to the global market. That could leave freight rates elevated because many ships would still be unavailable, old, contracted, or restricted by compliance rules. Higher transport costs can keep the delivered cost of crude and refined fuels under pressure.

The article links the US effort to affordability concerns over gasoline and diesel. It says months of war in the Persian Gulf and the Russia-Ukraine conflict have driven crude and fuel prices higher. The administration has also used sanctioned-oil waivers and reached a diesel export deal with Russia. These steps have not stopped Brent from remaining near a five-month high.

The likely effect is limited relief rather than a sharp price drop. The article does not provide a specific forecast for gasoline or diesel prices. It does say the freight rally shows no sign of slowing, while analysts expect tanker capacity to return gradually. That weakens the plan’s immediate price impact.

European Union and United Kingdom restrictions can block a tanker’s return even if Washington permits a sale. The article says both jurisdictions blacklist vessels, so a ship may remain exposed to European or UK penalties. That limits its ability to serve routes, customers, or financial partners that follow those rules.

Insurance is another major mechanism. The EU and UK dominate maritime insurance cover, according to the article. Shipowners and traders need commercially acceptable insurance for normal operations. If European or British insurers will not cover a vessel, a US decision alone may not make that tanker usable in mainstream trade.

This creates a gap between US sanctions relief and real commercial capacity. A vessel might be legally sellable under the proposed US process but still fail wider compliance checks or lack acceptable insurance. The article therefore identifies European and UK rules as practical barriers. Unilateral US action could produce fewer returning tankers than Washington intends.

Oil tankers carry crude from producing regions to refineries and buyers. Freight rates are what shippers pay for that transport. When available ships are scarce or routes become riskier, freight rates can rise. Those higher costs become part of the expense of moving crude and fuel through the supply chain, increasing pressure on prices.

The Strait of Hormuz illustrates the mechanism. The article says a supertanker can earn as much as $40 million per trip there. Such returns encourage owners to keep ships on lucrative Middle East routes rather than sell them. That reduces the incentive to add vessels to ordinary mainstream trading, even when governments want more capacity.

The article connects these conditions with high consumer costs. Months of war in the Persian Gulf and the Russia-Ukraine conflict have pushed crude and fuel prices higher. Brent remains near a five-month high, while freight rates continue to rally. If shipping capacity returns only slowly, transport costs may keep gasoline and diesel prices under pressure.