Iran rules out reopening Strait of Hormuz, returning to US talks until conditions met

As the conflict in Iran escalated, the nation's merchant fleet was seen as a form of economic insurance. The country possessed a large merchant fleet, a national oil tanker company, and a network of foreign tankers with opaque ownership. Tehran believed these assets would enable the country to export crude oil despite the pressures of war and sanctions.

However, the reality has proven less favorable. Despite not having lost any ships or dismantled the "shadow fleet," the war has created a significant gap between the number of vessels on paper and those that can safely enter Iranian ports, load oil or cargo, and depart. This crisis intensified in September when US Central Command reported destroying eight Iranian-linked tankers in two strikes.

The Islamic Revolutionary Guard Corps later claimed targeting ten vessels, including eight tankers and two American ships, signaling that tankers have become direct targets in the ongoing war. Iran's merchant fleet is challenging to quantify, with various estimates encompassing different categories such as vessels registered under the Iranian flag, ships owned or managed by Iranian companies regardless of their flag, and foreign tankers carrying Iranian oil as part of the "shadow network."

According to the Islamic Republic of Iran Shipping Lines (IRISL) in October 2025, their assets included 144 vessels with a combined capacity of approximately five million deadweight tonnes, while the National Iranian Tanker Company (NITC) operated 53 vessels with a combined capacity of nearly 13 million deadweight tonnes. The "shadow fleet" emerged due to sanctions that prevented conventional shipping companies, insurers, and banks from serving Tehran's exports.

It is not a unified fleet but rather a market of tankers, intermediaries, and front companies willing to accept greater risks for higher returns. Tankers often have multiple owners, flags, and managers, and may engage in deceptive practices to conceal the origin of their cargo. The International Maritime Organisation defines the "shadow fleet" as vessels involved in illegal activities aimed at circumventing sanctions or evading safety, environmental, and insurance rules.

However, the term lacks a universally accepted commercial definition, leading to varying estimates based on the producing organizations and their criteria. Since the beginning of 2026, more than 100 vessels linked to Iran's "shadow fleet" have been sanctioned by the US Treasury, though this figure represents only the ships identified and sanctioned during this period and not the complete count of the network.

The structure of the "shadow fleet" is both a strength and a weakness. When a tanker or company is sanctioned, the vessel's name, flag, and registered owner can be changed, allowing the network to adapt. However, this same adaptability is also a vulnerability, as tanker operators are not guaranteed to remain loyal to Tehran. They are primarily driven by the profit from each voyage and the risk of having their cargo seized or losing their ship.

Prior to the war, the primary challenge for "shadow tankers" was concealing the origin of their oil and avoiding sanctions imposed by the United States. Now, they must navigate a war zone and contend with a naval blockade, the threat of mines, military interceptions, and attacks involving missiles and drones. According to data from tracking companies Windward and Vortexa, Iranian oil exports dropped by 43% during the first two months of the war.

Following the United States imposing a blockade on Iranian ports on April 13, US forces redirected 44 Iranian vessels or ships connected to Iranian trade by the beginning of May. Nonetheless, exports did not cease entirely. A temporary arrangement in June allowed dozens of tankers to resume sailing through a narrow corridor near the Iranian coast, enabling the export of substantial quantities of crude oil and petroleum products.

However, this respite was brief. The collapse of this understanding and the reimposition of the blockade in mid-July disrupted the flow of oil once again.