Sanctions Cause Dozens of Oil Tankers to Halt Operations Globally

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In the wake of new U.S. sanctions announced on January 10, at least 65 oil tankers have dropped anchor across various global locations, including the coasts of China and Russia. Ship tracking data analyzed on Monday revealed this widespread disruption, underscoring the ripple effects of the latest measures targeting Russian oil producers and vessels.

 

According to MarineTraffic and LSEG data, five of these stationary tankers are located near Chinese ports, while another seven have anchored off Singapore. Additional vessels have halted operations near Russia, particularly in the Baltic Sea and the Far East. The sanctions, unveiled by the U.S. Treasury, aim to curb the revenues Moscow uses to fund its ongoing conflict in Ukraine. Among the targets are Russian oil producers Gazprom Neft and Surgutneftegaz, as well as 183 vessels involved in shipping Russian oil.

 

The implications of these sanctions have been immediate and significant. Tankers previously affected by earlier U.S. sanctions continue to face trading restrictions, while an additional 25 oil tankers remain stationary in areas such as Iranian ports and near the Suez Canal.  

 

In some cases, ports have preemptively responded to the sanctions. Shandong Port Group in China, for instance, has prohibited tankers under U.S. sanctions from docking at its facilities, according to traders last week. This move adds further complications to an already strained supply chain.

 

The broader impact on the global oil tanker fleet is notable. Analysts estimate that approximately 10% of the global fleet is now under U.S. sanctions. Omar Nokta, an analyst at Jefferies, commented, "The effect of these sanctions should be supportive to the tanker market as vessel supply in the broader fleet shrinks, but the real potential strength would come once other exporters make up for the lost volumes."

 

The sanctions are already influencing market dynamics. Average daily earnings for supertankers increased by more than 10% on Monday, reaching approximately $26,000. This surge reflects tightening vessel supply, as charterers scrambled to secure ships immediately following the sanctions' announcement.  

 

"Increased demand for exports to India and China from outside Russia will increase non-sanctioned tanker demand," noted trade analytics platform Kpler on Monday.  

 

As the global oil trade continues to adjust to these sanctions, the strain on tanker availability is likely to persist, reshaping market trends and creating new challenges for the industry.

 

Based on a report by Reuters 2024-01-15

 

 

[Purdey]

Maybe convert them to housing for illegal immigrants?