Recent events have brought renewed attention

This week, the UK sanctioned 100 vessels, and the EU followed with 189 more, now targeting over 340 ships involved in the grey trade. Meanwhile, geopolitical tensions have flared in the Baltic, where Estonia attempted to block a shadow vessel en route to Russia.

With enforcement increasing and political dynamics shifting, the shadow fleet’s future is a key factor for market fundamentals.

What could change going forward?
Several scenarios could reshape the shadow fleet’s role:

• US-Iran deal: A nuclear agreement could bring Iranian oil back to compliant trade, reducing shadow fleet demand, and hence increasing demand for compliant tankers that replace this trade.
• End of Russia/Ukraine war: It is unlikely in the short term, but if sanctions ease, it would shift volumes to the compliant fleet, as Russian crude and product exports would be replaced by compliant tonnage.
• No significant change: Shadow fleet activity would continue, but face rising regulatory pressure and operational risk.

What would happen if sanctions were lifted?
A Russia-Ukraine peace agreement and/or a US-Iran de-escalation would have a number of ramifications. These developments are crucial:

• A large share of the shadow fleet – especially older tonnage – would likely exit the market.
• This would tighten the compliant fleet supply and potentially push freight rates higher.
• Depending on where Iranian oil exports go, demand could increase by 40–100 Suezmax-equivalents, especially if trade shifts back to Asia and Europe.
• Newbuild demand could rise, particularly in crude segments.
• Some younger shadow vessels may re-enter mainstream trade.
• The transition could lead to a stronger rate environment and more stable, transparent market conditions.
  
  

In conclusion: Compliant fleet set to reap rewards
The shadow fleet has grown into a central part of global oil shipping, but its future is tightly linked to global politics. Whether through lifting sanctions or continued enforcement crackdowns, its role is likely to shift significantly. This creates mainly upside risk for the compliant market, a tighter supply, and stronger freight rates.