Shadow-Fleet Sanctions Plan Jolts Tanker Stocks as Seaways Buys Bruton's VLCC Quartet for $370m

Asian shipping stocks took a beating on 15 October on reports that the Trump administration is discussing exemptions that would allow blacklisted tankers linked to Russia, Iran and Venezuela to carry oil and petroleum products not themselves subject to US sanctions. A US official told Reuters that companies would need Treasury approval to employ the vessels, with the initiative designed to release additional tanker capacity and bring down record freight rates; no formal easing has yet been announced. US energy secretary Chris Wright raised the possibility during a video address to the World Petroleum Congress in Riyadh, according to Energy Aspects. COSCO Shipping Energy plunged more than 13% in Hong Kong while China Merchants Energy Shipping, COSCO Shipping Energy's Shanghai-listed shares and China Merchants Nanjing Tanker hit their 10% daily downward limits in mainland trading.

The scale of the squeeze the proposal is aimed at is unprecedented: Clarksons Research estimates 1,010 oil tankers totalling 121m dwt are individually sanctioned, equal to 17% of global tanker capacity. Analysts are sceptical the relaxation would change much. SEB told clients that any additional mainstream capacity would be limited because most sanctioned tankers are elderly and already trading, though a small number of vessels for the Hormuz shuttle could help get more barrels to market. Becky Smart of Sentosa Shipbrokers told Splash that Russian-linked tonnage looked a more plausible candidate for relief than Iranian-controlled ships, but questioned both the political wisdom and commercial effectiveness: major oil companies and EU- or UK-aligned entities are unlikely to rush toward vessels that were sanctioned until recently, and many would struggle to meet vetting, maintenance and insurance requirements.

The policy noise landed in a market where modern tonnage is repricing sharply. On 16 October International Seaways agreed to take over Tor Olav Troim-backed Bruton in a transaction valuing the Oslo-listed VLCC company at around $370m, acquiring its entire four-ship 300,000 dwt supertanker portfolio at an exchange ratio of 0.0519 Seaways shares per Bruton share, with minority holders taking cash at $6.3044 a share. The fleet includes the LNG dual-fuel Mount Vision, which entered service in July on a 3+1+1-year deal at $95,000 a day for the first nine months before switching to an index-linked structure, and sistership Mount Horizon, due from China's New Times Shipbuilding next month and already fixed for 12-15 months at $105,700 a day. Mount Frontier and Mount Summit follow in August and October 2027.

The price gap is the point for shipbuilding. Bruton's own figures put the original yard cost of the two 2027 ships at about $117m apiece, while brokers had been discussing values north of $200m per vessel - roughly the distance newbuilding prices and secondhand values have travelled in this cycle. Bruton had built a 12-ship VLCC programme before splitting the business in August, retaining four New Times newbuildings and transferring eight to separately listed OMC Tankers, with Chinese lessors financing 85% to 90% of construction costs. International Seaways, which had around 70 vessels including newbuildings before the deal and sold seven older tankers including two VLCCs for more than $216m this year, reported preliminary third-quarter net income of $340m to $350m and liquidity of about $965m at the end of September.