Astronomical Oil Shipping Costs: Trump Considers Using Shadow Fleet

The Trump administration is considering easing sanctions on some shadow fleet tankers as rising oil shipping costs, driven by escalating tensions in the Strait of Hormuz, pile pressure on the market.

Following the increase in oil transportation costs due to the escalation of tensions in the Strait of Hormuz, the Trump administration is considering reducing the embargo on some shadow fleet tankers.

Ambassador Arjan-Economic Group: The US government is considering reducing the sanctions imposed on oil tankers known as the "Shadow Fleet"; Oil tankers that have previously been used to transport oil and oil products from countries including Russia, Iran and Venezuela. According to Reuters, an American official announced on Wednesday that the purpose of reviewing this measure is to increase the capacity of sea transportation and reduce the rates of oil and oil products that have reached unprecedented levels. According to this report, negotiations in the US government are focused on the possibility of transporting what Washington calls "legal oil" using oil tankers that have already been sanctioned. Legal oil means crude oil or products that are not subject to US sanctions; Therefore, this plan does not mean issuing a license for the transfer of sanctioned oil from Russia or Iran. This American official said that Washington's goal is to get more crude oil and oil products out of the Persian Gulf region and reduce the pressure on the maritime transportation market. Companies that want to use sanctioned oil tankers to transport authorized cargoes must apply to the US Treasury Department for permission.

US Energy Secretary Chris Wright also said in a video message to the World Petroleum Congress in Riyadh that the US government is considering easing sanctions on the shadow fleet with the aim of reducing shipping rates. Referring to these statements, the research group "Energy Aspects" announced that the increase in transportation costs has affected the demand for American crude oil. Reuters has stated that it has not been able to access the full version of this video or its transcript. The escalation of tensions and insecurity in the Strait of Hormuz has brought the cost of transporting oil to new records. According to the report of the International Energy Agency on October 14, the price of transporting a giant oil tanker from the Persian Gulf to Asia reached about 36 dollars per barrel in early October; A figure more than 5 times the level before the Iran war. At the same time, the daily rental rate of supertankers on the route from the Persian Gulf to East Asia in the first week of October jumped by 40% to nearly 1.4 million dollars per day; This figure is about 540% more than the pre-war level. Reuters also reported on October 13 that the cost of transporting Russian Urals oil from the Black Sea to India increased to 27-30 million dollars for each one-way trip, while this figure was around 19 million dollars in September.

However, experts are skeptical about the effect of this measure on transportation rates. The Energy Aspects Institute believes that the reduction of sanctions will not necessarily lead to a significant drop in the price of oil tankers; Because many of the embargoed tankers have remained active despite the sanctions in recent months. The agency has also stated that only a limited number of tankers may be available to carry cargo on the routes connected to the Strait of Hormuz, and lifting the restrictions will not add significant capacity to the main shipping fleet in the short term. On the other hand, shipping industry sources told Reuters that even if the US sanctions were eased, insurance companies would Tankers still have to comply with EU and UK regulations; An issue that could limit the effect of any reduction in US sanctions on shipping rates. 

The Ramadan war showed that the Strait of Hormuz is no longer just an energy passage, but Iran's most important geopolitical lever in post-war equations. Trump's acknowledgment of Hormuz's decisive role in stopping conflicts and recent developments in shipping has turned this waterway into one of the main axes of possible negotiations between Tehran and Washington.

Citing sources familiar with US intelligence reports, the New York Times questioned Donald Trump's claim that the oil passing through the Strait of Hormuz does not belong to Iran, and reported the payment of the passage of some ships to Iran.

In the editorial of Astana, we wrote that the expansion of the war to Pakistan, Türkiye, and Saudi Arabia, which have not been directly involved so far, can change the scene of the American-Israeli war. Now it can be said that America is trying to bring Iran face to face with the whole world, and this is clear from Trump's recent speech at the United Nations.