Iran struggles as Russian oil remains afloat amidst sanctions
Since the end of last year, more than a thousand container ships from the so-called shadow fleet have been sanctioned by the West. Meanwhile, according to data from the International Maritime Organization, a UN agency, Russia, Iran, and Venezuela are competing for ships that are not on the sanction lists.
Following additional sanctions by the United States and the European Union on Russian oil tankers, the fleet of available ships has significantly shrunk. According to Bloomberg, Iran faces the most significant challenges in selling its oil.
In 2024, Tehran used about 150 tankers for transporting its oil. However, more than 100 of them have been added to the U.S. Department of the Treasury's Office of Foreign Assets Control's list of sanctioned ships.
Problem for Iran, Moscow has an advantage
This is a significant issue for Iran because it has a contract with China to supply 25 million barrels of oil. With the increased number of tankers added to the sanction list, Tehran is selling less of this resource. Deliveries have dropped to around 1.5 million barrels per day, down from 1.76 million in November last year. Bloomberg forecasted two days ago that exports could fall by one-third of the current levels by May.
Russia has an advantage in this competition for container ships, as it attracts carriers with higher freight rates. African countries such as Sierra Leone, Guinea-Bissau, Guinea, the Comoros, Gabon, and the landlocked Eswatini are primarily seizing this opportunity. Each of these countries has seen a significant increase in the number of ships registered under their flags in the past twelve months.
Fewer available tankers
The global fleet of tankers comprises about 14,000 ships, including 3,000 tankers for transporting oil and 11,000 for transporting products and chemicals. Since the end of last year, the number of tankers sanctioned by the US, EU, and G7 countries has exceeded a thousand.
The American corporation, S&P Global Market Intelligence, specializes in financial analysis, revealed in its February report that over 800 ships do not have confirmed insurance.
Moreover, the average age of sanctioned ships is 21, which means they are about eight years older than the global average. However, this does not deter African companies managing these flags from focusing on profits.
