WorldUS
Trump administration weighs easing sanctions on shadow fleet tankers to cut freight costs
The idea would let sanctioned vessels carry oil that is not itself under US sanctions, as record shipping rates and fuel prices weigh on Republicans before the midterms.
Key points
- Washington is considering letting sanctioned 'shadow fleet' tankers carry legal oil.
- Energy Secretary Chris Wright said easing curbs would bring down high freight rates.
- Russian and Iranian oil would remain under sanctions under the plan.
The Trump administration is reported to be considering sanctions relief for the “shadow fleet”, the vessels that have carried oil and fuel from Russia, Iran and Venezuela, in an effort to bring down record global freight rates.
The talks, described by a US official, began a few days after President Donald Trump temporarily lifted sanctions on Russian diesel. They centre on letting previously sanctioned ships carry “legal oil”, meaning cargo that is not itself under US sanctions. Russian and Iranian oil would remain off limits, and the aim is to get more crude and fuel moving out of the Gulf. Companies wanting to use the vessels would have to apply to the Treasury Department.
Energy Secretary Chris Wright made the case in a video address to the World Petroleum Congress in Riyadh, saying that easing the curbs would cut freight rates, which have dampened demand for American oil. The Department of Energy says the move would not help Russia ship its own oil.
High fuel prices are a political worry for Trump before the 3 November midterm elections, when Republicans are trying to hold both houses of Congress.
Shipping industry figures are doubtful. They say most sanctioned tankers are old and in poor condition, so the change would not add much capacity quickly, and that insurers still have to follow EU and British rules, which limits any fall in rates.
New Delhi has been watching Washington’s oil moves closely. Asked on Wednesday about the US-Russia diesel deal, Ministry of External Affairs spokesperson Randhir Jaiswal declined to comment on the commercial arrangements but said: “we have always advocated for stability in global energy markets.”