- Russia, Iran, Venezuela Boost Hunt for Aged VLCCs.
- Shadow Fleet Renews Ships While Scrapping the Oldest Units.
- Shipbreakers Expect More Demolition as HKC Rules Bite.
Tanker operators involved in sanctioned trades are still on the hunt for older vessels in the secondhand market this year. They’re focused on refreshing their fleets while sending their oldest ships off to be scrapped. Analysts and ship-tracking data reveal a surge in activity among buyers connected to Russia, Iran, and Venezuela, who are relying on less visible operators to keep oil flowing despite the tightening grip of Western sanctions, reports S&P Global.
Active Market for 15–20-Year-Old Tankers
Brokers are reporting a steady demand for tankers that are 15 to 20 years old, largely due to the need for long-haul shipments to Asian buyers and ship-to-ship operations.
“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,” Nikesh Shukla, analyst at S&P Global Energy CERA, said. “The exporters as well as importers of the sanctioned oil would prefer to insulate themselves from any adverse impact of the sanctions.”
High Volumes of Vintage Tanker Sales
A recent note from BRS said 262 tankers over 15 years old were sold in the first ten months of the year, with 130 linked to sanctioned trades. “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.
Mainstream Owners Offload VLCCs to the Shadow Fleet
Research from Breakwaves Advisors and Braemar indicates that mainstream owners have sold 28 Very Large Crude Carriers (VLCCs) to the shadow fleet this year, with more demand on the horizon. The US has ramped up its measures, imposing sanctions on major Russian exporters like Rosneft and Lukoil, and blacklisting several vessels tied to Iranian routes.
“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.”
Prices for Older VLCCs Remain Firm
The strong demand has pushed up secondhand prices, with 15-year-old VLCCs valued at $59 million in late November—an increase of 7% compared to last year, according to XClusiv Shipbrokers. In the past ten months, 20 tankers from the shadow fleet, averaging 24 years old, have been scrapped, as reported by S&P Global Commodities at Sea.
Scrapping Driven by Viability and Fleet Renewal
“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.”
Shipbreakers Eye More Shadow Fleet Demolition
Ship recycling companies have noted that some breakers might be able to acquire shadow fleet vessels at discounted prices due to the risks associated with sanctions, although Western authorities haven’t targeted recycling yards yet. A previous study by S&P Global Energy and Market Intelligence found 940 shadow fleet tankers over 27,000 dwt operating as of May, with 60% being over 20 years old and many lacking proper insurance and flag oversight—raising significant safety concerns.
“Out of the HKC-compliant 110 yards in India, not even 25% capacity is functional,” Thorat said. “People are waiting for ships to come.”
Recycling Nations Await More Tonnage
Scrap dealer GMS’s trader Kiran Thorat said increased demolition would provide employment opportunities and reduce sanctioned-trade capacity. Recycling centres in Turkey, India, Bangladesh and Pakistan have upgraded facilities to meet standards under the Hong Kong International Convention for safe ship recycling, which took effect 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.”
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Source: S&P Global
