Jones Act Barriers Limit Domestic Options
The US Treasury Department is weighing a case-by-case process that could let legitimate buyers purchase certain sanctioned “shadow fleet” tankers and return them to lawful commercial service, according to reporting by Platts (S&P Global Energy) on November 10, 2026. Officials indicated the approach could cover 50–80 vessels owned by non-sanctioned companies, with perhaps 20–30 owners prepared to move quickly. The goal is to expand the pool of tankers available for non-sanctioned oil and products, helping ease elevated global freight rates without benefiting sanctioned parties.
A US official told Platts: “Treasury may consider proposals from legitimate shipping actors to purchase and restore shadow fleet vessels to the licit shipping industry on a case-by-case basis.” The process is designed to ensure “no sanctioned person receives any benefit, and reduces the size of the fleet overall, while helping address pressures on the global energy market.”
This builds on earlier public comments by Energy Secretary Chris Wright. At a Citadel Securities event in New York on October 19, Wright described moving vessels from what he called the “bad-guy fleet” to the “good-guy fleet.” Buyers would acquire idle sanctioned tankers, refurbish them, and operate them only on legal cargoes. Wright stressed that the initiative is not a blanket lifting of sanctions and that an approval process would apply. He estimated the broader “dark” or shadow fleet at roughly 1,600 vessels and said the effort could eventually bring dozens or hundreds of ships into legitimate trade.
Background and Scale
S&P Global Commodities at Sea data cited in the Platts report put the total number of tankers sanctioned by the US, UK, or EU at 1,225 as of the end of September 2026, of which 560 were under US sanctions. Shadow-fleet vessels have already been drifting into compliant trades in 2026 as freight rates rose: 41 crude tankers entered compliant trade through October 20, with a higher share remaining compliant than in prior years. Dirty Arab Gulf–China VLCC freight averaged about $197/mt in September, up sharply from August.
Related reporting (Reuters, Bloomberg, and others) has framed the discussions as a response to tight tanker supply and high freight costs amid Middle East disruptions and other constraints. OFAC has previously delisted vessels after sales to non-sanctioned operators (examples include Hakuna Matata and Pinocchio). Any new authorizations would be individual licenses or removals after due diligence, not a general license.
Jones Act Implications for US Buyers
US companies could, in principle, be among the legitimate buyers if they obtain the necessary OFAC authorization. However, these vessels would almost certainly not qualify for Jones Act (coastwise) service.
The Merchant Marine Act of 1920 (Jones Act, primarily 46 U.S.C. § 55102) restricts transportation of merchandise between US points to vessels that are:
- Built in the United States (hull and superstructure major components fabricated and the vessel assembled in a US shipyard, subject to strict Coast Guard rules on foreign content);
- Owned by US citizens (or qualifying US entities);
- Documented under the US flag with a coastwise endorsement; and
- Crewed predominantly by US citizens (master, officers, and at least 75% of the remaining crew).
Foreign-built tankers do not meet the US-build requirement. Narrow historical exceptions (vessels captured as prizes of war, forfeited for law violations, or wrecked and rebuilt in the US at a cost of at least three times salvage value) do not apply to ordinary second-hand shadow-fleet purchases. US Coast Guard and CBP rules have consistently treated the build requirement as a hard barrier for coastwise endorsement.
Foreign-built vessels can be reflagged into the US registry for international or foreign-commerce service under certain pathways, including the Maritime Security Program (MSP) or related voluntary sealift support arrangements. Recent Coast Guard guidance has streamlined some reflagging steps for eligible foreign-built ships (often via classification society rules and international conventions). Those ships remain ineligible for coastwise trade; MSP and similar programs are explicitly limited to foreign commerce or mixed trades allowed under a registry endorsement, not domestic cabotage.
In short, a US company could potentially buy, OFAC-clear, and operate (or reflag for international use) one of these tankers, adding capacity to global non-sanctioned trades and possibly contributing to lower freight rates. It could not place the vessel in regular Jones Act domestic service (US Gulf to East Coast, Gulf to West Coast, Alaska, Hawaii, Puerto Rico, etc.) without major legislative or regulatory change.
Temporary administrative Jones Act waivers have been used in 2026 for certain energy movements amid supply disruptions; those are time-limited, voyage- or cargo-specific, and do not convert a foreign-built ship into a permanently Jones Act-qualified vessel.
Bottom Line
The reported Treasury approach offers a pragmatic way to recycle older sanctioned tonnage into legal markets and modestly ease freight pressure. For Energy News Beat readers focused on US domestic energy logistics, the practical limit is clear: these ships can expand international capacity available to American buyers and operators, but the Jones Act’s US-build rule keeps them outside the coastwise fleet. Any actual transactions will depend on individual OFAC reviews, vessel condition and age, ownership chain documentation, and commercial terms in a still-tight second-hand market.
Appendix: Sources and Links
- Platts / S&P Global Energy (primary report, Nov. 10, 2026): https://www.spglobal.com/energy/en/news-research/latest-news/crude-oil/111026-us-treasury-may-allow-purchase-of-sanctioned-tankers-on-case-basis
- Hellenic Shipping News summary: https://www.hellenicshippingnews.com/us-treasury-may-allow-purchase-of-sanctioned-tankers-on-case-basis/
- Oil & Gas Middle East coverage: https://www.oilandgasmiddleeast.com/news/sanctioned-tankers-us-case-by-case
- Reuters (Oct. 14–15, 2026 reporting on Treasury considerations): https://www.reuters.com/legal/government/us-considers-easing-sanctions-shadow-fleet-vessels-cut-freight-rates-official-2026-10-15/
- Bloomberg / related Wright comments (Oct. 19, 2026): https://www.bloomberg.com/news/articles/2026-10-19/us-allows-dark-fleet-oil-tankers-to-shed-sanctions-wright-says-mvfm8egd
- Maritime Executive on Wright S&P deals: https://maritime-executive.com/article/wright-us-sanctions-relief-for-shadow-fleet-tankers-will-be-for-s-p-deals
- Euromaidan Press / Wright “bad-guy to good-guy” framing: https://euromaidanpress.com/2026/10/22/from-bad-guy-fleet-to-good-guy-fleet-us-will-let-investors-buy-sanctioned-tankers-and-return-them-to-legal-trade/
- Jones Act statutory and regulatory framework: 46 U.S.C. § 55102; 46 U.S.C. § 12112; 46 C.F.R. parts 67 and related; CBP Jones Act guidance: https://www.cbp.gov/document/guidance/jones-act
- CRS background on Jones Act (R45725): https://www.congress.gov/crs-product/R45725
- Coast Guard / MARAD reflagging and MSP context (NVIC 01-13 and related): eCFR 46 CFR Part 296; recent USCG streamlining reports via Maritime Executive and industry summaries.
- S&P Global Commodities at Sea shadow-tanker statistics referenced in Platts and secondary reports (Oct. 23 and Oct. 29, 2026 notes).
All figures and direct quotations are drawn from the cited Platts/S&P reporting and con
