Written by: Fatima Younis
The US administration intends to take strategic steps aimed at increasing the efficiency of the global oil transport sector by integrating oil tankers that were subject to sanctions, known as the "shadow fleet," into legal commercial routes. This move comes as part of Washington's efforts to control high shipping costs that have been exacerbated by tensions in the Strait of Hormuz and their direct impact on global energy flows.
Mechanism for transitioning to the legal route
US Energy Secretary Chris Wright announced that the US government has established a special approval process allowing investors to purchase and upgrade tankers that were classified under the shadow fleet to operate legally in oil transport. Wright explained during an event in New York that this move does not mean lifting sanctions on those vessels, but rather includes technical and legal rehabilitation processes to transition these tankers from the "shadow fleet" to a fleet that complies with international standards, ensuring they are free from any sanctions-subject shipments in the future. Estimates indicate there are about 1,600 tankers in the shadow fleet, and this initiative is expected to contribute to adding dozens or hundreds of additional ships to the legal market.
Economic goals and logistical challenges
These moves come in response to significant pressure on prices in the US market, especially with election deadlines approaching and rising fuel prices. Geopolitical crises and the closure of the Strait of Hormuz have caused the costs of shipping oil from the Arabian Gulf to East Asia to rise to record levels, reaching six times what they were before the escalation. In a related context, Wright indicated the possibility of understandings with Russia regarding diesel exports, provided there is a de-escalation in the Ukrainian conflict and repairs to refining infrastructure, as part of a broader vision to stabilize global energy markets.
Maritime sector warnings
In contrast, the US administration's plan has raised concerns from INTERTANKO, which represents tanker owners. The association emphasized that the reintegration of old vessels cannot be done without careful and comprehensive examination of their technical condition, ownership structures, and insurance coverage. It warned that any leniency in these standards could pose risks to the safety of crews and the marine environment, and it also cautioned that this move might send the wrong message to shipping companies that have invested huge sums to comply with strict legal standards over the past years.
