5 September 2024 Lloyd's List Intelligence
Frontline: Sanctions and regulations won’t halt dark fleet rise, overcapacity will
THE dark fleet* is the new scrapping for tanker shipping. Tankers over 20 years old that used to go to the breakers carry cargoes for Iran, Venezuela and Russia instead. But there’s a limit to how large the dark fleet can grow, because it faces the same supply-demand fundamentals as the compliant fleet.
That upper limit will be reached “soon”, predicted Frontline chief executive Lars Barstad during a conference call on Friday.
“What we have ended up seeing is a two-tier market that is developing in front of our eyes,” he said.
“The divide between what we would refer to as the compliant and non-compliant markets has grown over the last 12 to 18 months. Currently — and this is quite surprising to some — 23% of the global tanker fleet is suspected to be or is involved in sanctioned trades.”
Frontline has its own definition of non-compliant tankers. It includes two categories: what it calls the “dark fleet”, which it defines as vessels listed by the US Office of Foreign Assets Control or United Against Nuclear Iran (UANI), and the “grey fleet”, which it defines as vessels suspected of carrying sanctioned cargo based on Automatic Identification System tracking.
By this definition, Frontline calculates that 150 very large crude carriers (17% of the fleet), 131 suezmaxes (21% of the fleet), and 317 aframaxes/long range two tankers (28% of the fleet) are now non-compliant.
Frontline: 23% of global fleet suspected to be involved in sanctioned trades
Grey fleet: vessels suspected of carrying sanctioned cargo based on AIS tracking. Dark fleet: vessels listed by OFAC or UANI. Total share of sanctioned-trade involvement (23%) only relates to trades Frontline operates in: VLCC, suezmax, aframax/LR2. Source: Frontline 2Q24 investor presentation.
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