US weighs easing sanctions on shadow fleet oil tankers
The talks would let "legal oil" not under US sanctions move on previously sanctioned vessels, Reuters reports.
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US officials are discussing easing sanctions on shadow fleet tankers, vessels previously sanctioned for carrying Russian and Iranian oil, according to Reuters. The new talks center on allowing "legal oil", crude or refined products not sanctioned by Washington, to move on those vessels, rather than Russian or Iranian cargoes, Reuters reported via the Jerusalem Post.
Energy Secretary Chris Wright said in a video address to the World Petroleum Congress in Riyadh that the administration is discussing the change to cut record freight rates, research group Energy Aspects said, according to Reuters. Companies seeking to use the vessels would need approval from the US Treasury Department, and the aim is to get more crude and refined products out of the Gulf at a time when high freight rates have cut into demand for US crude, Reuters reported.
The US Department of Energy said the move would not help Russia move its oil or oil products, Reuters reported. Energy Aspects said easing the sanctions would not meaningfully affect freight rates, though it could free a small number of tankers for shuttle runs through the Strait of Hormuz. Maritime industry sources told Reuters that EU and UK rules would still bind ship insurers regardless of any US change.
On October 8, the Treasury imposed fresh sanctions on 17 vessels tied to Iran's shadow fleet under what a Treasury official called Operation Economic Outcast, describing it as the most significant blow yet to that network, Reuters reported. The official said Iran had no more than about 20 million barrels of crude left on tankers outside the reach of that blockade, against global oil consumption of roughly 100 million barrels a day.
Easing the sanctions would mark a tangible loosening of enforcement against vessels that have been central to Russian and Iranian oil flows evading Western restrictions, running counter to the push by Kallas and other European officials for tighter sanctions on Russia. It also sits awkwardly alongside separate US talks with Russia's Alexander Novak and Kirill Dmitriev over sanctioned diesel supply mechanisms, suggesting Washington may be loosening enforcement on more than one front at once.