US sanctions see traders walking away from 300 tankers

The impact on total tanker gross tonnage insured with the International Group of P&I Clubs was looking greater by the week over the past couple of months.

Nearly 300 oil tankers globally had been placed “off limits” because companies in the shipping sector were afraid of breaching US sanctions against Iran and Venezuela by mistake, Reuters reported, citing unnamed industry sources.

The US moves have taken roughly 3% of the global oil tanker fleet out of the market, which would have a small but detectable impact on the total gross tonnage insured each year by Clubs within the International Group – which could have knock-on effect on renewal prices for the Groups that would not like to see their total tonnage insured reduce too significantly.

Unipec, the trading arm of China’s Sinopec, Swiss trader Trafigura AG, oil firm Equinor ASA, and Exxon Mobil Corp have reportedly turned their back on 250 crude and oil products tankers which have carried Venezuelan oil in the past year.

COSCO Shipping Tanker (Dalian) owns 43 tankers and 3% of the global VLCC fleet. For Clubs that have already lost Iranian tanker business after the reimposition of US sanctions, the move of these vessels to Chinese insurance groups will be another blow.

Referring to the COSCO Dalian tankers, Anoop Singh, regional head of tanker research at ship broker Braemar ACM said that “this is now a handicapped set of vessels which are difficult to trade”.