US President Donald Trump's administration is allowing oil tanker under sanctions to begin a process to legitimately ship crude, Energy Secretary Chris Wright said on Monday.
Mr Wright told a Citadel Securities event in New York that this would involve investors buying and refurbishing idled sanctioned tankers, then using them to transport legal oil.
“We’re going to move some of the ships from what I call the ‘bad-guy fleet’ to the ‘good-guy fleet,’” Mr Wright said. “They will not carry sanctioned oil any more.”
He said there are about 1,600 tankers in the "dark fleet", and that dozens or hundreds could be added to the legitimate ships.
It is the latest attempt by the Trump administration to reduce energy prices, which have soared amid the prolonged closure of the Strait of Hormuz.
Brent crude, the global benchmark for much of the world's oil, settled 0.48 per cent lower on Monday at $109.3 a barrel. West Texas Intermediate, which tracks US crude, was 0.61 per cent lower at $98.42.
Analytics firm Kpler said easing sanctions on the shadow fleet would have little effect on record freight rates.
It estimated that only 24 of the about 160 vessels under sanctions from the Treasury Department's Office of Foreign Assets Control could return to mainstream trade after taking into account their age and ownership restrictions.
“With war risk, rather than vessel availability alone, driving freight costs in the Middle East Gulf, sanctions relief risks delivering limited commercial benefits while weakening geopolitical leverage,” analysts wrote.
Mr Wright rejected the idea that the process would be dropping penalties from ships that would carry crude from Russia, Iran or other countries on which the US imposed sanctions.
“We are converting dark tankers to legitimate tankers,” he said.
