Scandinavian bank SEB said in a note to clients that any additional mainstream capacity would be limited, noting that most sanctioned tankers are elderly and already trading. "A small number of additional vessels for the Hormuz shuttle trade could help get more barrels to market, which would be positive," SEB observed.
Insurance is the second constraint. Even with US permission, ship insurers would still have to comply with EU and UK rules, meaning vessels may remain constrained by other regulatory and insurance requirements. The impact on the global maritime transport market is therefore likely to be partial, rather than immediate and universal.
The market reaction and the political backdrop
Asian shipping stocks took a beating on Thursday as reports of the proposal sent investors scrambling to reassess the extraordinary freight boom. COSCO Shipping Energy plunged more than 13% in Hong Kong, while China Merchants Energy Shipping, COSCO Shipping Energy's Shanghai-listed shares and China Merchants Nanjing Tanker hit their 10% daily downward limits in mainland trading. The sell-off also spread to other shipping sectors.
The proposal follows Washington's decision last Friday to temporarily authorise Russian diesel trade until April 7, 2027, drawing criticism from Kyiv and US lawmakers. Ukrainian President Volodymyr Zelenskyy, European countries and some of Trump's fellow Republicans in the US Senate called that move a gift to Russian President Vladimir Putin that would provide Russia with revenue to keep funding its war in Ukraine.