The proposal was raised earlier this week by US Energy Secretary Chris Wright at the World Petroleum Conference in Riyadh, Saudi Arabia. Wright said a shortage of tankers had become a key bottleneck driving up freight rates. Removing sanctions on vessels could provide some relief.
This move is part of President Donald Trump’s administration efforts to contain fuel prices before the midterm elections, which will determine control of Congress. Elevated inflation following the Iran war has affected support for Trump’s Republican Party.
US consumer inflation rose to 3.7% in September as higher fuel prices spread through the economy. Diesel prices averaged $6.31 a gallon on Thursday, just below a recent record high of $6.53. The International Energy Agency has warned of a global diesel shortage lasting until mid-2027.
The administration has also urged allies to release more diesel into the market, threatened an export ban, and allowed tax-free red diesel to be used on public roads.
However, analysts expect easing tanker sanctions to have only a limited impact on prices. Energy consultancy Energy Aspects estimates that 13-19% of the global tanker fleet is under US sanctions. It said the vessels’ age and poor condition would limit any increase in effective shipping capacity. It also noted that most tankers sanctioned over Russian or Venezuelan links had continued trading in recent months.
Research group Kpler said the move would have virtually no impact on the current tanker crisis. It argued that elevated fuel prices were driven mainly by heightened war risks in the Middle East rather than vessel shortages alone.
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The proposal has also raised concerns over Washington’s approach towards Moscow. Last week, Trump said he would temporarily lift sanctions on Russian diesel, drawing criticism from European allies and a bipartisan group of US senators.