Sanctioned Oil Tanker Becomes First VLCC To Be Scrapped In Two Years

The Amor, a 24-year-old very large crude carrier (VLCC) linked to transporting Iranian oil, is set to be scrapped in India. According to reports from BRS Shipbrokers and Wirana Shipping Corporation, the vessel was sold to an Indian scrapyard last week.

This makes it the first planned scrapping of a supertanker since 2022, when the Uranus, another tanker linked to the sanctioned oil trade, was demolished in Bangladesh.

The Amor, flagged in Cameroon, was part of the “dark fleet”-consisting of older ships used to transport oil under sanctions imposed by Western nations.

Western sanctions have intensified scrutiny on vessels suspected of transporting sanctioned oil, making it harder for operators to keep such ships in service.

The Amor was listed by the U.S. Energy Information Administration (EIA) in October 2024 as a vessel involved in the export of Iranian crude. However, it has not been officially blacklisted by U.S. authorities.

Industry analysts believe the ship’s age, structural issues, and recent detention at a Chinese port due to multiple deficiencies, including fire safety issues and unclear load markings, may have contributed to its sale for scrapping.

David Wech, chief economist at analytics firm Vortexa, said that tighter sanctions and lesser demand have impacted the viability of such tankers. He added that operators must act quickly before vessels lose their value.

Tougher sanctions by the U.S., U.K., and European Union have expanded the number of vessels under sanctions.

Since October 2024, the U.S. alone has added over 30 supertankers, capable of carrying 60 million barrels of oil to its list of restricted ships. These sanctions target vessels involved in deceptive shipping practices, such as flag-hopping and using false documentation.

The sanctions have also affected tanker rates. Weak oil demand from China, a major consumer of Iranian and Russian crude, has further pushed rates down, leaving many operators struggling to get work for their aging fleets.

Selling a ship like the Amor for scrapping can help owners avoid further losses. However, industry experts warn that if a vessel is blacklisted by the U.S. Office of Foreign Assets Control (OFAC), its scrap value drops significantly.

Scrapyards and dealers typically avoid dealing with such ships to prevent facing secondary sanctions.

The Amor is currently off the coast of Khor Fakkan in the United Arab Emirates, heading toward the scrapyard in Alang, Gujarat, India. While the sale has been confirmed, there remains a possibility that the deal could be reversed before the ship reaches its destination.

Reference: Bloomberg

Source: Maritime Shipping News