Trump Administration Weighs Easing Shadow Fleet Sanctions to Cut Freight Costs

Key Facts

1The Trump administration is considering allowing 'legal oil' on previously sanctioned vessels to reduce record freight rates.

2Energy Secretary Chris Wright referred to the talks in a video message to the World Petroleum Congress.

3Analysts expect the impact on freight rates to be limited due to EU and UK ship insurance regulations.

The Trump administration is considering easing sanctions on "shadow fleet" tankers to allow them to transport legal oil in an effort to lower record-high freight rates. Reuters reported that the move aims to expand available shipping capacity, requiring companies that wish to utilize these previously sanctioned vessels to apply for permission from the US Treasury.

Energy Secretary Chris Wright referred to the ongoing discussions in a video message to the World Petroleum Congress, according to Energy Aspects. However, analysts expect the impact on global freight costs to be limited by stringent ship insurance regulations in the European Union and the United Kingdom, which may restrict the scale of the policy's implementation.