Some of the world's largest oil trading houses are asking the US government for permission to bring sanctioned oil tankers back into service, as a shortage of available vessels drives oil transportation costs to unusually high levels. According to a Bloomberg report published Friday, which cited people familiar with the matter, the traders involved are Trafigura, Vitol, Mercuria and Abu Dhabi National Oil Co.
The companies are negotiating with US officials for licenses that would allow them to purchase or lease tankers currently on US sanctions lists. The discussions cover approximately 50 vessels that are subject to American sanctions. Treasury officials are reported to be weighing whether to grant the requested approvals.
The push reflects the pressure that the vessel shortage is placing on the physical oil market. With freight costs climbing to what the report describes as extraordinary levels, traders that move large volumes of crude and refined products face rising expenses on every cargo they charter. Access to an additional pool of roughly 50 tankers would, if approved, expand the available fleet for these companies at a time when shipping capacity is tight.
For the wider industry, the outcome of the talks could matter on two fronts. Charterers and shipowners are watching how freight rates develop, since transportation costs feed directly into the delivered price of oil. At the same time, the case tests how the US Treasury balances sanctions enforcement against market disruptions, and whether licenses can be granted case by case without undermining the broader sanctions regime.
No decision has been announced, and the report indicates only that officials are considering the requests. If approvals are granted, the sanctioned vessels would return to commercial service under the license holders' control; if refused, traders would continue to compete for the remaining unencumbered fleet, with freight rates likely to remain elevated as long as the shortage persists.
Source: Oilprice
