The Trump administration is planning to add 50 oil tankers under its sanctions list as an effort to choke off maritime trade between Iran and Venezuela. However, analysts said that it would be unlikely to boost tanker rates under normal circumstances due to low demand caused by the coronavirus pandemic.
According to the US Treasury’s Office of Foreign Assets Control (OFAC) in its website, the country has so far imposed sanctions on 130 oil and fuel tankers, up from about 80 a year earlier. The sanctioned vessels include VLCCs and other tankers that can carry crude oil and refined products.
A study by Marex Spectron found that renting a VLCC for the US-China route could cost as much as $8.5 million if Washington added a total of 28 VLCCs under its sanction list. This is compared to the current fee of around $6.5 million. For reference, the US sanctioned units of China’s COSCO in September 2019, causing the shipping cost for the US-Asia route to soar to about $20 million.
The sanction can also limit vessel availability. Analysts said that pressure on the fleet could incur penalties if shipowners were late to load or unload cargoes.
