Increase in Tanker Rental Rates Following New US Sanctions Against Iran and Russia

Following the imposition of new US sanctions against several Russian oil companies and 183 tankers carrying oil from Russia and Iran on Saturday of this week, the transit rate of oil from the Middle East to China rose by 39 percent, and the price of oil from Gulf Arab countries also increased. Reuters reported on Tuesday, January 25, that the rental rate for large tankers capable of carrying 2 million barrels of oil has surged to $37,800, marking a 39 percent increase compared to last Friday. The US Treasury Department sanctioned 183 tankers carrying Russian oil to China and India on January 22, at least eight of which were involved in the smuggling of Iranian oil. Statistics from Lloyd's shipping company indicate that currently, 35 percent of the 669 tankers known as the 'shadow fleet' or 'ghost fleet', which are secretly involved in the smuggling of oil from Iran, Russia, and Venezuela, are sanctioned by the US. A major port in China has banned the entry of sanctioned tankers carrying Iranian oil. Most of these old tankers, operated by non-European and non-American companies, transport oil to markets in India and China by turning off their automatic identification systems, and are linked to the smuggling of Iranian crude oil. The United Against Nuclear Iran organization reported that there are 477 tankers in the 'shadow fleet' carrying Iranian oil, of which 139 were sanctioned by the US last year, particularly in the last three months of 2024, with a similar number sanctioned in previous years. Meanwhile, the Shandong Ports Group, the largest oil terminal receiving oil from Iran, Russia, and Venezuela, banned the entry of US-sanctioned tankers on January 18. Reuters reported at that time, citing data from commodity information company Kpler, that Shandong ports received 1.74 million barrels of oil from Iran, Russia, and Venezuela daily last year, accounting for 17 percent of China's total oil imports. The amount of Iranian oil discharged at all ports in China last year was approximately 1.46 million barrels. Reuters, referencing oil trade sources, stated that following the sanctions on dozens of tankers in the 'dark fleet', Chinese refineries have turned to purchasing more oil from Europe, Africa, and Arab countries in the Middle East. The price of the OPEC oil basket, which mainly reflects the oil of Gulf Arab countries, has jumped four dollars in recent days; a sign of rising demand for oil from these countries in Asian markets.