31 October 2024 Vortexa
Record number of tankers sanctioned in 2024
At the time of the webinar, over 130 oil tankers had been sanctioned by the EU, UK and US in 2024, a record-high, with VLCCs and Aframaxes being the predominant target. These tankers were sanctioned for Russia and Iran designations, with the aim of reducing these tankers’ employment in these respective trades.
On the 17th October, an additional 25 oil tankers were sanctioned for Iran & Russia designations, by the US and the UK. This suggests that governments continue to apply pressure, focusing on slowing down fleet employment in these sanctioned trades.
Russia and Iran respond differently to sanctions
Tankers sanctioned for Russia designations resulted in a 400kbd cut in crude and DPP exports y-o-y specifically on these tankers, because of difficulties finding employment. On the other hand, Iran has increased its crude exports over this period by 300kbd on sanctioned tankers, suggesting sanctions are having no impact on the Iranian market as exports have grown.
One reason for this difference in response is that whilst tanker-specific sanctions in the Russian market are new, the National Iranian Tanker Company (NITC) fleet have been sanctioned for years. Those tankers continue to trade, mainly conducting Iranian port calls, so the impact from sanctions now on the Iranian market is muted because they have created methods over a sustained period of time to circumvent sanctions.
There is also a difference within Russia’s response to sanctions, depending on which government is making the designations. OFAC (US) sanctioned tankers in the Russian market lost 300kbd crude exports y-o-y whilst EU & UK sanctioned tankers only lost 50kbd over the same period, proving US effectiveness over EU/UK sanctions. This suggests there is higher risk aversion to employing tankers sanctioned by the US as opposed to the EU & UK.
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