President Donald Trump is reportedly considering easing restrictions on shadow fleets that have transported oil from sanctioned countries like Russia, Venezuela and Iran amid soaring gas and diesel prices in the U.S.
Record-High Freight Rates May Have Influenced the Decision
According to a report by Reuters on Wednesday citing an unnamed U.S. official, the decision is in response to surging freight rates globally following disruptions in the Strait of Hormuz and the Gulf region as a whole. The report adds that the move would allow oil from unsanctioned origins to be transported on previously sanctioned vessels.
A Reuters report on Monday also outlined heightened shipping costs. The cost of shipping oil on tankers from the Americas to refineries in Asia had reached upwards of $40 per barrel. Notably, a Very Large Crude Carrier (VLCC) has a capacity to transport roughly 2 million barrels of crude oil, which translates to $80 million per voyage.
The White House did not immediately respond to Benzinga’s request for comment.
Iran Reveals Details of Strait of Hormuz Attack
The news comes as Iran shared images of a titled vessel in the Strait of Hormuz, saying that the tanker had hit a naval mine while traveling to what the Islamic Revolutionary Guard Corps (IRGC) described as the unauthorized and dangerous route through the waterway.
Earlier, Obsidian Risk Advisors’ Managing Principal, Brett Erickson, had argued that Iran’s strikes in the Gulf of Oman on vessels pointed to the IRGC taking it “easy” on Trump and that strikes further away from the Strait of Hormuz could result in the end of ship-to-ship transfers generally used by shadow fleet vessels.
Risk Analyst Says Trump Pressuring Ukraine
As shadow fleet talks surface, Erickson also pointed to Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk, saying that the reported disruption of the Starshield system was out of SpaceX’s hands as the constellation was managed by the Trump administration.
The analyst hinted that the system may be leveraged by the White House to pressure Ukraine into halting Russian energy strikes. Zelenskyy, on the other hand, vowed to resume strikes despite Trump’s energy ceasefire, saying that Russians were not respecting the purported agreement.
Oil and Gas Movement
According to data provided by the American Automobile Association (AAA) on Thursday, the national average price of gas rose to $4.3344/gallon. Diesel also rose on Thursday, with the national average price remaining above the $6 mark per gallon at $6.3173.
On the oil front, the West Texas Intermediate (WTI) crude futures contracts expiring in November 2026 fell 0.64% to $94.48 at press time. Brent futures contracts ending in December dropped 2.33% to $103.59 at press time.
Oil ETFs, following the slip in oil futures, recorded declines, with the United States Oil Fund (NYSE: USO) falling 0.71% to $152.51 during pre-market trading on Thursday. The ProShares Ultra Bloomberg Crude Oil (NYSE: UCO) also fell 0.59% to $60.16 during pre-market trading.
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