US weighs lifting sanctions on Iran's 'shadow fleet' to address surging costs

The United States is contemplating the lifting of sanctions on "shadow fleet" tankers, belonging to Russia and Iran, in order to tackle the rising costs of diesel fuel as the nation prepares for midterm elections, according to several accounts and a high-ranking American official. Energy Secretary Chris Wright, who provided a video address to an energy forum in Riyadh this week, mentioned that the administration is deliberating on easing sanctions on these vessels to counteract the record freight rates that have escalated the expenses of shipping American energy abroad, as stated by the Energy Aspects research group.

The Financial Times reported on Thursday that the US might permit the sale of blacklisted vessels to non-sanctioned operators and lift sanctions, allowing these ships to operate without any limitations. Meanwhile, Reuters suggested that the US could enable "legal oil" to be transported on previously sanctioned vessels, effectively enabling sanctioned ships to carry crude or petroleum products that are not sanctioned by the US.

Iran's shadow fleet expanded significantly in 2018, following the US unilateral withdrawal from the Joint Comprehensive Plan of Action nuclear agreement with Iran and its allies. The US has imposed severe sanctions on Iran, with a particular focus on its oil industry, estimating that around 15 percent of the world's tanker fleet falls under US sanctions.