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Jittery tanker market amid tariffs and sanctionsJittery tanker market amid tariffs and sanctions

Global tanker markets are often beset by geopolitics but rarely have they faced the level of uncertainty that prevails as President Trump is inaugurated in Washington later on Monday.

Paul Bartlett, Correspondent

January 20, 2025

2 Min Read
A Cosco Shipping VLCC
File Photo of a Cosco Shipping VLCCCredit: Cosco Shipping

Later today, President-elect Trump will become the 47th President of the United States having declared that his ‘America First’ strategy will make America great again.  In its latest weekly opinion piece, New York broker Poten & Partners identifies three key issues which are likely to have a significant impact on tanker trades.

First, there are tariffs that Trump has threatened to impose in his ‘MAGA’ (Make America Great Again) strategy. Specifically, those that may be forced on neighbours Canada and Mexico could have major implications on crude oil and products trades in and around North America. However, Poten notes that Trump has also mentioned Iran, Venezuela and China in the context of tariffs. He has also made threatening noises about the Panama Canal.

Then there is the issue of sanctioned tankers. Early in the year, the Shandong Port Group Co. Ltd, a leading Chinese port operator which, Poten says, serves many of the country’s so-called ‘teapot’ refineries, said it would block tankers listed on the US sanctions list by the US Office of Foreign Asset Control (OFAC).

At that time, this applied to 39 vessels and was in addition to 73 tankers sanctioned by the UK and 69 by the European Union. However, since there is a degree of overlap between the sanctioning bodies, the total number of sanctioned vessels was 135.

Related:Tanker market outlook for 2025

On 10 January, OFAC added a further 161 tankers, doubling the total to 270 tankers. The new sanctions also targeted two oil producers, several traders, some providers of marine insurance, and some oil service companies.

Poten estimates that the tankers subjected to sanctions earlier this month shipped 40% of Russian crude, 1.6 barrels per day (bpd), in 2024. Noting that of the 39 tankers that OFAC had originally sanctioned, 33 have remained idle, Poten concludes that the new sanctions are likely to limit significantly the trading activity of the latest round of sanctioned ships.

Meanwhile, India – the largest importer of Russian crude – has indicated that it will also prevent OFAC-sanctioned tankers from docking in the country’s ports when the transition period ends on 12 March. The result, Poten suggests, is that Russia will be looking for alternative markets in which to sell oil and could be forced to sell at below the $60 per barrel price cap, boosting tanker utilisation and day rates.

Then there is the ceasefire in Gaza which came into force on 19 January, following which the Houthi in Yemen have said they will halt targeting all except wholly Israel-owned or flagged vessels transiting the Red Sea and surrounding waters.  However, recent indications, certainly among liner majors, is that Red Sea transits are unlikely to resume for some time yet.

Related:Houthis to end Red Sea attacks, except against Israeli ships

Poten concludes by warning: “We are only in January and President Trump is not even in office yet. It is time to fasten your seatbelts: 2025 could be a bumpy ride!”

About the Author

Paul Bartlett

Correspondent

UK-based Paul Bartlett is a maritime journalist and consultant with over four decades of experience in international shipping, including ship leasing, project finance and financial due diligence procedures.

Paul is a former Editor of Seatrade magazine, which later became Seatrade Maritime Review, and has contributed to a range of Seatrade publications over the years including Seatrade’s Green Guide, a publication investigating early developments in maritime sustainability initiatives, and Middle East Workboats and Offshore Marine, focusing on the vibrant market for such vessels across that region.

In 2002, Paul set up PB Marine Consulting Ltd and has worked on a variety of consultancy projects during the last two decades. He has also contributed regular articles on the maritime sector for a range of shipping publications and online services in Europe, Asia, and the US.

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