The Trump administration is considering easing sanctions on so-called shadow fleet tankers that have carried oil and petroleum products from Russia, Iran and Venezuela, in an effort to bring down record-high global freight rates, a US official said this week.
Reuters reported on October 15 that the discussions centre on letting "legal oil" flow on previously sanctioned vessels — meaning crude or petroleum products not sanctioned by Washington, rather than Russian or Iranian oil, which remain under punitive measures. Companies wanting to use the sanctioned vessels would have to apply to the US Treasury Department, the official said. The Department of Energy has said any move would not help Russia move oil or oil products.
Diesel pressure ahead of the midterms
The proposal was raised earlier this week by Energy Secretary Chris Wright in a video address to the World Petroleum Conference in Riyadh. Wright argued that a shortage of tankers had become a key bottleneck driving freight rates higher. The Financial Times separately reported that the proposed measures could let sanctioned vessels return to global commercial shipping after being sold to legitimate buyers, with the Treasury's Office of Foreign Assets Control authorising such transactions case by case.
The push comes amid intense domestic pressure over fuel costs. US consumer inflation rose to 3.7 percent in September as higher fuel prices spread through the economy, and diesel averaged $6.31 a gallon on Thursday, just below a recent record high of $6.53. The International Energy Agency has warned of a global diesel shortage lasting until mid-2027.
Sceptics on both sides
The talks follow Trump's temporary lifting of sanctions on Russian diesel fuel, a move that drew criticism from Ukrainian President Volodymyr Zelenskyy, European allies and some of Trump's fellow Republicans in the Senate, who called it a gift to Russian President Vladimir Putin. Analysts are split on the new idea: Energy Aspects estimates 13-19 percent of the global tanker fleet is under US sanctions but says the vessels' age and condition would limit any capacity gain, while research group Kpler argues elevated fuel prices are driven mainly by Middle East war risks rather than vessel shortages, and the move would have virtually no impact on the current crisis.
Sources:
US considers easing sanctions on shadow fleet vessels to cut freight rates, official says — Reuters
Trump mulls easing restrictions on Russian, Iranian 'shadow fleet' amid soaring diesel prices — BusinessToday
Reuters reported on October 15 that the discussions centre on letting "legal oil" flow on previously sanctioned vessels — meaning crude or petroleum products not sanctioned by Washington, rather than Russian or Iranian oil, which remain under punitive measures. Companies wanting to use the sanctioned vessels would have to apply to the US Treasury Department, the official said. The Department of Energy has said any move would not help Russia move oil or oil products.
Diesel pressure ahead of the midterms
The proposal was raised earlier this week by Energy Secretary Chris Wright in a video address to the World Petroleum Conference in Riyadh. Wright argued that a shortage of tankers had become a key bottleneck driving freight rates higher. The Financial Times separately reported that the proposed measures could let sanctioned vessels return to global commercial shipping after being sold to legitimate buyers, with the Treasury's Office of Foreign Assets Control authorising such transactions case by case.
The push comes amid intense domestic pressure over fuel costs. US consumer inflation rose to 3.7 percent in September as higher fuel prices spread through the economy, and diesel averaged $6.31 a gallon on Thursday, just below a recent record high of $6.53. The International Energy Agency has warned of a global diesel shortage lasting until mid-2027.
Sceptics on both sides
The talks follow Trump's temporary lifting of sanctions on Russian diesel fuel, a move that drew criticism from Ukrainian President Volodymyr Zelenskyy, European allies and some of Trump's fellow Republicans in the Senate, who called it a gift to Russian President Vladimir Putin. Analysts are split on the new idea: Energy Aspects estimates 13-19 percent of the global tanker fleet is under US sanctions but says the vessels' age and condition would limit any capacity gain, while research group Kpler argues elevated fuel prices are driven mainly by Middle East war risks rather than vessel shortages, and the move would have virtually no impact on the current crisis.
Sources:
US considers easing sanctions on shadow fleet vessels to cut freight rates, official says — Reuters
Trump mulls easing restrictions on Russian, Iranian 'shadow fleet' amid soaring diesel prices — BusinessToday
