The U.S. government, led by Energy Secretary Chris Wright, has issued a license for the use of sanctioned tankers to transport non-sanctioned oil. This action is intended to increase the number of available ships for oil transport in light of disruptions caused by the war in Iran and the closure of the Strait of Hormuz.
Converting Sanctioned Tankers to Legal Tankers
The U.S. Energy Secretary announced at an event in New York that the government is collaborating with investors who are purchasing and refurbishing sanctioned tankers to use these ships for transporting non-sanctioned oil. Wright stated, "We are moving some of the ships from what I call the 'rogue fleet' to the 'good fleet'" and emphasized that these ships will no longer carry sanctioned oil.
Read more: Increase in crude oil and refinery product prices on October 19, 2023
Economic and Political Implications
This statement marks the first public explanation from the government regarding the use of sanctioned tankers to increase oil supply in the global market. Wright pointed out that there are about 1,600 tankers in the global dark fleet, and converting these tankers to legal vessels could increase the number of authorized ships for oil transport worldwide. This action comes at a time when fuel prices have risen due to increased tensions in the Middle East and concerns about high fuel costs.
Wright also noted that the cost of transporting oil from the Gulf to East Asia has increased to more than six times what it was before the onset of conflicts. These price fluctuations not only affect the global market but will also impact American voters who are concerned about high fuel prices.
Impact on the Global Oil Market
Given the rising transportation costs of oil and the need to increase supply, converting sanctioned tankers to legal vessels could help improve the oil supply situation in the global market. Wright clarified that this action is designed to create better conditions for consumers in the near future.
The government is also seeking to establish a verification process to grant legal status to these ships, and Wright emphasized that the goal of this action is not just to lift sanctions, but to convert dark tankers into legal tankers.
Read more: Qatar's liquefied gas shipment is heading to Poland via the Red Sea · Severe decline in oil revenues of Gulf countries due to the Strait of Hormuz crisis
