Tanker operators focusing on sanctioned trades have continued to acquire aged ships in secondhand markets this year to renew their fleets while sending some of their oldest ships to scrapyards, according to several tanker analysts, industry participants and ship tracking data.
In recent years, Russia, Iran and Venezuela have partnered with little-known operators to assemble a large shadow fleet(opens in a new tab) to maintain overseas oil sales, despite tightening Western sanctions.
Tanker brokers and analysts said the sale-and-purchase market for tankers aged 15-20 years has remained active this year, with the sanctioned countries needing suitable tonnage for long-haul shipments to Asian buyers and ship-to-ship transfers.
“We expect that Russian/Venezuelan/Iranian exporters and shadow fleet operators would continue to buy more vessels for trade, storage and logistic operations like STS,” S&P Global Energy CERA analyst Nikesh Shukla said.
“The exporters as well as importers of the sanctioned oil would prefer to insulate themselves from any adverse impact of the sanctions.”
In a recent note, BRS said 262 tankers aged over 15 years were sold in the first 10 months of this year, of which 130 ships were sanctioned.
“Vintage tankers continue to be the standout driver of sale-and-purchase activity … reflecting the ongoing appetite for older ships capable of operating within or adjacent to sanctioned trades,” the shipbroker said.
Based on research by Breakwaves Advisors and Braemar, mainstream shipowners have sold 28 VLCCs into the shadow fleet this year, and the sanctioned countries will need more of the large tankers going forward.
The US sanctioned Russia’s top oil exporters Rosneft and Lukoil in October, after blacklisting dozens of ships in Iranian trades in recent quarters. Tensions have also flared between the US and Venezuela in the past few weeks.
“Russia, Iran and Venezuela will need to be more aggressive in their hunt for compliant vessels,” Breakwaves Advisors and Braemar said. “They will now all be turning to VLCCs as the workhorse for long-haul trade and floating storage.”
Strong demand has supported secondhand prices for old VLCCs, according to BRS and Drewry. XClusiv Shipbrokers estimated the price for a 15-year-old VLCC at $59 million as of end-November, up 7% year over year.
Scrapping
Separately, an analysis of S&P Global Commodities at Sea(opens in a new tab) data has found 20 shadow fleet tankers were sent to junkyards in the past 10 months. The ships had a total capacity of 1.8 million dwt and an average age of 24 years.
“The sales and purchases done by shadow fleet operators are mainly based on operational considerations,” Shukla said. “The vessels sold for scrapping were too old [and] therefore uneconomical to operate, and the recent purchase activities by shadow fleet operators were aimed at renewing the fleet to ensure smooth operations.”
Two companies involved in ship recycling said that some shipbreakers could have acquired shadow fleet tankers at lower prices. Transactions involving such ships carry sanction risks, but Western authorities have yet to target ship recyclers in those trades.
An earlier S&P Global Energy and Market Intelligence study(opens in a new tab) revealed 940 shadow oil tankers of 27,000 dwt or larger were in operation as of May, of which 60% were aged 20 years or more, while large portions lacked insurance and flag administration. Many shipping professionals said they should be removed from trading to mitigate safety and environmental risks.
Kiran Thorat, a trader at scrap dealer GMS, said shadow fleet demolition would provide scrapyards employment opportunities after years of limited recycling and remove shipping capacity for sanctioned countries.
Shipbreakers in Turkey, India, Bangladesh and Pakistan, the world’s largest ship recycling nations, have been investing in eco-friendly facilities in recent years to meet the requirements of Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, which came into force in June 2025.
“Out of the HKC-compliant 110 yards in India, not even 25% capacity is functional,” Thorat said. “People are waiting for ships to come.”
Source: Platts
