US allowing 'dark fleet' oil tankers to ship crude, Energy Secretary says

The United States administration has announced that oil tankers under sanctions will begin a process to legitimately ship crude, according to Energy Secretary Chris Wright. This move involves investors purchasing and refurbishing idled sanctioned tankers, which will then transport legal oil. Wright explained that this transition will shift some of the vessels from the "bad-guy fleet" to the "good-guy fleet," ensuring they no longer carry sanctioned oil.

There are approximately 1,600 tankers in the "dark fleet," and the administration aims to add dozens or hundreds more to the legitimate ships. This initiative is seen as a response to the increase in energy prices, which have risen due to the prolonged closure of the Strait of Hormuz. Brent crude, the global benchmark for much of the world's oil, settled 0.48% lower at $109.3 a barrel, while West Texas Intermediate, tracking US crude, fell 0.61% to $98.42.

Despite the potential benefits, analytics firm Kpler believes that easing sanctions on the shadow fleet will have minimal impact on record freight rates. The firm estimated that only 24 out of the approximately 160 vessels under sanctions could return to mainstream trade, considering factors like age and ownership restrictions. Wright dismissed concerns that the process would drop penalties from ships transporting crude from sanctioned countries like Russia and Iran. He emphasized that the goal is to convert dark tankers into legitimate ones.