Escalating freight costs have prompted the United States government to consider lifting sanctions on Russian shadow fleets to bolster shipping activity out of the Persian Gulf.
Global oil prices surged to record highs amid geopolitical tensions on key maritime routes, including the Persian Gulf and the Strait of Hormuz.
Fighting between Saudi Arabia and Yemen’s Houthis threatens to keep oil at premium prices ahead of the US midterm elections in November.
Cutting shipping rates
According to a Reuters report on Wednesday, a US official said discussions have begun on authorising Russian shadow fleet tankers to operate and transport crude oil and petroleum products.
This move is expected to boost crude and petroleum supply to global markets, and in turn cut down international freight rates.
Under the initiative, shipping companies interested in using Russian shadow tankers to transport oil will have to submit applications to the US Department of the Treasury for permission.
Shadow fleets carrying oil products evade Western sanctions by posing as ships operated by third-world countries or by registering opaque ownership structures to confuse regulators.
The proposal came after the US Treasury announced a temporary easing of sanctions on Russian diesel. US President Donald Trump said Russian President Vladimir Putin has agreed to supply 1.8 million tonnes of diesel until April 2027 to stimulate the market and curb demand.
READ MORE: Elon Musk shifts blame to Donald Trump over disruption on Ukraine’s Starlink access
Sceptics express doubts
However, research group Energy Aspects said this measure would not necessarily bring down maritime rates and inflation.
In a note, the firm said that the majority of these tankers are old and poorly maintained, limiting their capacity to meaningfully impact oil supply.
Additionally, these tankers will still be subject to regulations from other stakeholders, like the United Kingdom and the European Union.
Despite this, the measure is still expected to increase the number of tankers operating in Hormuz, which is still under blockade by the US.
Other critics said that lifting sanctions on Russian shadow tankers would only help fund Moscow’s war with Ukraine.
US domestic impact
With crucial midterm elections set to kick off next month, Trump’s Republicans are pressured to maintain control over the two chambers of the US Congress.
Local opinion polls show that Trump is getting more unpopular as American households continue to lament the worsening state of the US economy and soaring inflation.
The economy, immigration, jobs, and the war with Iran are the top issues concerning voters going to the November midterm elections.
According to the latest Fox News poll, Trump sank to his lowest approval rating ever, at 36%, in his two terms as president.
About 76% of Republican respondents approve of Trump, with only 23% expressing disapproval, while 98% of Democratic respondents and 78% of independents said they disapprove of the president’s performance.
READ NEXT: Louvre boss seeks EUR1billion funding for museum overhaul, warns of closure risk
Ciara Mina 
Rosemarie Zamora 
Jacinth Banite