Russia-Ukraine, Iran wars: Why the US may ease sanctions on shadow fleet tankers – and what it means for both conflicts | Today’s news
The US is considering easing restrictions on oil tankers linked to Russia and Iran as the Trump administration seeks to reduce soaring diesel prices ahead of elections in November. The move could increase shipping capacity and lower shipping costs, but risks weakening Western pressure on Moscow amid its war with Ukraine.
The proposals include allowing blacklisted vessels to be sold to legitimate operators and lifting sanctions to allow them to operate in global markets, people familiar with the matter told the Financial Times.
A U.S. Treasury official said the Office of Foreign Assets Control (OFAC) can authorize such transactions “on a case-by-case basis,” provided legitimate buyers buy and restore the vessels for legitimate commercial use.
The proposal was made earlier this week by US Energy Secretary Chris Wright at the World Petroleum Conference in Riyadh, Saudi Arabia. Wright argued that the shortage of tankers was a major constraint driving up global shipping rates and fuel costs.
“The administration is looking under every rock it can to try to lower fuel prices before the election, even if the policy would only have a marginal effect,” said Bob McNally, a former energy adviser to George W. Bush and president of Rapidan Energy.
why now
The move comes after data this week showed US consumer inflation jumped to 3.7% in September, with a recovery in fuel prices washing over the economy.
The White House scrambled to counter the surge, leaning on allies to release more diesel and threatening to impose an export ban. Trump also signed an executive order allowing untaxed red diesel to be used on public roads. But diesel prices remain stubbornly high, averaging $6.31 a gallon at the pump on Thursday, just below the record high of $6.53 in recent weeks.
The International Energy Agency has warned of a global diesel shortage that will last until mid-2027.
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But analysts doubt whether the easing of sanctions against tankers would significantly lower prices. Between 13% and 19% of the global tanker fleet is under US sanctions, according to Energy Aspects, but the age and poor condition of these vessels could limit their contribution to commercial shipping capacity.
Research group Kpler expects the measure to have virtually no impact on the current tanker crisis and says higher fuel prices are mainly due to increased war risks in the Middle East, not a shortage of vessels per se, the FT reports.
What this means for both wars
For Russia, the easing of restrictions could create further opening of the oil trade and potentially weaken economic pressure to limit Moscow’s war effort.
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Italian Prime Minister Giorgia Meloni on Wednesday criticized Trump’s plan to buy diesel from Russia, calling it a “very risky choice” and saying it undermined international pressure on Vladimir Putin to end the war in Ukraine.
As for the Iran war, the proposal reflects Washington’s efforts to curb fuel costs in times of conflict in the Middle East. But if tanker restrictions are eased without a substantial improvement in supply, the administration could face criticism for weakening sanctions without providing meaningful relief at the pump.
