Trump administration weighs easing sanctions on shadow-fleet tankers to cut freight rates
The administration of US President Donald Trump is exploring whether to ease sanctions on vessels of the so-called "shadow fleet" that previously carried oil from Russia, Iran, and Venezuela. The stated goal is to bring down record-high global tanker freight rates and boost exports from the Persian Gulf, but companies would still need individual licenses from the US Treasury and would be limited to non-sanctioned "legal oil," according to the US Department of Energy.
Key points
- The Trump administration is considering easing restrictions on "shadow fleet" tankers that previously transported oil from Russia, Iran, and Venezuela.
- The stated goal is to reduce record-high global tanker freight rates and increase oil and fuel exports from the Persian Gulf region.
- US Energy Secretary Chris Wright raised the issue in a video address at the World Petroleum Congress in Riyadh this week.
- Companies using sanctioned vessels would need individual licenses from the US Treasury and could only carry non-sanctioned "legal oil," not Russian or Iranian crude under US sanctions.
- The US Department of Energy says the move would not help Russia transport its oil or petroleum products.
- Analysts at Energy Aspects and maritime-industry representatives are skeptical the easing would have a significant effect on freight rates, noting that shadow-fleet tankers are old and that EU and UK sanctions rules would still apply.
- The discussion comes days after Trump temporarily lifted US sanctions on Russian diesel fuel, a step criticized by Ukrainian President Volodymyr Zelensky, European countries and some Republican senators.
Why it matters
A relaxation of restrictions on shadow-fleet vessels would reshape global oil transport flows and could pull down record-high freight rates that have made US crude too expensive for Asian refiners. The discussion comes just days after Trump temporarily lifted US sanctions on Russian diesel — a step sharply criticized by Ukrainian President Volodymyr Zelensky, European governments and some Republican senators as a gift to Vladimir Putin that could help Russia finance its war against Ukraine. Any easing directly affects the shipping of Russian, Iranian and Venezuelan oil, a politically sensitive issue in the context of the US role in the war in Ukraine and the enforcement of sanctions. High oil and fuel prices are also creating political pressure for Trump ahead of the November 3 US midterm elections, when Republicans hope to retain control of both chambers of Congress. Analysts and maritime-industry representatives, however, are skeptical that lifting restrictions would meaningfully lower freight rates, citing the wear of shadow-fleet tankers and the parallel constraints of EU and UK sanctions.
What happened
The Trump administration is exploring whether to ease sanctions on vessels of the so-called "shadow fleet" — tankers that previously transported oil from Russia, Iran, Venezuela and other countries and that are now under US restrictions. US Energy Secretary Chris Wright raised the issue this week in a video address to the World Petroleum Congress in Riyadh; Reuters was unable to obtain the full video or transcript, and fragments of his remarks were published on social media. Wright said the administration is discussing the easing as a way to bring down record-high global tanker freight rates, which have made US crude too expensive for Asian refineries and pushed them toward alternative supplies from the Middle East and Latin America. Under the approach, companies that want to use sanctioned vessels would need to obtain individual licenses from the US Treasury and would only be permitted to carry non-sanctioned "legal oil" — not Russian or Iranian crude that remains under US sanctions. The US Department of Energy said any such move would not help Russia transport its oil or petroleum products. The discussion comes days after Trump temporarily lifted US sanctions on Russian diesel fuel, with the Treasury issuing a license permitting the sale, delivery, unloading and import of Russian-origin diesel until April 7, 2027. On October 9 Trump said he had agreed with Vladimir Putin on supplying hundreds of thousands of tons of Russian diesel to world markets to lower prices ahead of the November 3 US midterm elections.
Where reporting differs
Sources disagree on the duration of Trump's lifting of sanctions on Russian diesel: most reports and the US Treasury license specify a term until April 7, 2027, while one cited item refers only to April 7 without a year. They also differ on what the easing of shadow-fleet sanctions would mean in practice. Some Ukrainian-source reports frame it as potentially helping Russian oil exports by enabling transport of Russian diesel, while the US Department of Energy and other sources insist the measure would only apply to non-sanctioned "legal oil" and would not help Russia transport its oil or petroleum products.
Background
Tanker freight rates have risen to record levels against the backdrop of conflicts linked to Iran and Ukraine, intensifying inflation and pushing Asian refineries toward alternative supplies from the Middle East and Latin America. Earlier in October, Trump temporarily lifted US sanctions on Russian diesel fuel — the Treasury license runs until April 7, 2027 — a move criticized by Ukrainian President Volodymyr Zelensky, European countries and some Republican senators as a gift to Putin that could help Russia finance its war. In early October, the United Kingdom sanctioned eight vessels involved in Russian LNG exports, including three shadow-fleet tankers, two bunker vessels and three Russian ice-class vessels, some of which had begun voyages only in July 2026. Ukraine has said it may treat vessels of the Russian shadow fleet as military objects, a position voiced by the Vice Prime Minister for Reconstruction. The EU plans to expand its Mediterranean naval mission against the fleet, and EU foreign policy chief Kaja Kallas has warned of oil-spill risks near European coasts from shadow-fleet operations.