U.S. Plans to Let Refurbished Sanctioned Tankers Carry Permitted Oil

The U.S. plans to let some sanctioned oil tankers return to permitted trade after buyers purchase and refurbish them, a move aimed at easing high shipping costs without broadly lifting sanctions.

Energy Secretary Chris Wright outlined the approach Oct. 19 at a Citadel Securities event in New York. Investors have proposed acquiring idle vessels, refitting them and using them to carry oil that is not subject to U.S. sanctions. The vessels would need approval before returning to service.

“They will not carry sanctioned oil anymore,” Wright said. He rejected removing sanctions from the dark fleet as a whole.

The remarks add a purchase and refurbishment option to an earlier U.S. proposal to let some sanctioned tankers carry permitted oil. That proposal required Treasury Department approval for companies seeking to use a vessel.

Wright said shipping costs were higher than the administration wanted. Separately, ship-to-ship transfers outside the Strait of Hormuz have occupied tankers and reduced available capacity, contributing to higher freight costs. Buyers would need to complete a purchase and refurbishment and obtain approval before putting a vessel back into permitted trade.