Traders Seek US Approval to Use Sanctioned Oil Tankers
What happened
Major oil traders, including Trafigura, Vitol, Mercuria, and Abu Dhabi National Oil Co., are seeking permission from U.S. officials to purchase or lease blacklisted oil tankers. These discussions involve approximately 50 vessels currently under U.S. sanctions. Treasury officials are reviewing these requests on a case-by-case basis, though no decisions have been finalized.
From oilprice.com
Why it matters
The request comes as global vessel shortages have pushed oil transportation costs to extraordinary levels. Shipping disruptions stemming from the Iran war have forced tankers onto longer routes and increased insurance costs. Adding sanctioned vessels could help relieve pressure on the market, especially as Asian orders for U.S. crude fell roughly 50% in October.
From oilprice.com
Who's involved
- TrafiguraMultinational commodities company seeking permission to use sanctioned tankers
- VitolDutch petroleum company seeking permission to use sanctioned tankers
- Mercuria Energy GroupCompany named as a trader seeking permission for sanctioned tankers
- NamibiaCountry whose market price might be affected by easing vessel shortages
- VenezuelaCountry whose crude export costs might decrease with increased shipping capacity
- IraqCountry whose crude export costs might decrease with increased shipping capacity
- HormuzStrait near which shipping disruptions have tied up vessels
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Mercuria Energy GroupSpeculative
Mercuria Energy Group might benefit from increased shipping capacity, which could improve its revenue.
- VitolSpeculative
Vitol might benefit from increased shipping capacity, which could improve its revenue.
- TrafiguraSpeculative
Trafigura might benefit from regulatory action that restores shipping capacity, which could improve its revenue.
- NamibiaSpeculative
Namibia might see a reduction in market prices due to easing global vessel shortage and transport costs.
- VenezuelaSpeculative
Venezuela might see a reduction in the cost of exporting its crude due to increased global shipping capacity.
- IraqSpeculative
Iraq might see a reduction in the cost of exporting its crude due to increased global shipping capacity.
- HormuzSpeculative
The region near Hormuz might see reduced geopolitical dependency as shipping capacity is added to ease disruptions.