A potential shift for compliant owners
The G7 is stepping up its efforts to crack down on the shadow fleet, which now accounts for over 20% of the world's tanker fleet. Foreign ministers have called for expanded satellite tracking of ships to monitor illegal ship-to-ship oil transfers and unregistered tankers, many of which are carrying Russian oil under sanctions.
What does the shadow fleet mean?
The term shadow fleet describes a collection of aging ships that are typically in poor condition, lack adequate insurance, and operate with fake registrations, thereby posing considerable threats to maritime safety and environmental protection. This fleet is often engaged in the transport of oil under sanctions from countries like Russia, Iran, and Venezuela. The G7's initiative for tighter regulation could lead to sanctions, the detention of vessels, and higher compliance costs for operators of these shadow ships.
Taking action against these vessels could interfere with global oil distribution, redirecting more shipments to the compliant tanker market. Should this be implemented, it may lead to increased demand and elevated freight rates for compliant operators.
Source: Tradewinds