A Seized Oil Tanker Off Venezuela and the Big Business of Dark Fleet Smuggling

The U.S. seizure of a vessel off Venezuela is likely to squeeze the country’s government, but do little to counter the tankers that secretively move oil from sanctioned countries.

The United States’ seizure of a tanker on Wednesday off the coast of Venezuela was clearly meant to rattle that country’s autocratic government.

The move will most likely make it more difficult for Venezuela to export oil, squeezing a crucial source of revenue for the government of President Nicolás Maduro.

“It will affect all vessels to Venezuela for sure,” said Angeliki Frangou, the chief executive of Navios Maritime Partners, a Greek tanker owner and operator. “It’s a very loud message.”

But shipping and oil market experts said the operation was unlikely to significantly disrupt a broader network of vessels that move oil from Russia, Iran and Venezuela in violation of sanctions imposed by the United States and other countries.

There is no formal count of the ships engaged in this trade, but experts widely agree that it has ballooned since Russia invaded Ukraine in 2022. S&P Global Energy estimated the fleet grew 45 percent in the year that ended in May. In response to that war, the United States, the European Union and others placed sanctions on Russia, one of the world’s biggest oil producers.

It is hard to determine who owns or operates the aging tankers, which are often referred to as a dark or shadow fleet. The vessels, which shipping and energy experts estimate make up 10 to 20 percent of the global tanker fleet, often disguise where they are traveling. They do that by manipulating the system that large vessels must use to transmit their location and speed.

Venezuela, which has been subject to various U.S. sanctions for years, relies heavily on the dark fleet to export its oil, most of which finds its way to China. The seizure this week, and President Trump and other administration officials saying that they intend to target more vessels, could deter tanker operators from sending ships to Venezuela, analysts said.

“This is going to increase the cost of running shadow fleet ships, and it’s going to make it less appealing, even for some of these inscrutable characters,” said Robin Brooks, a senior fellow at the Brookings Institution.

On Thursday, the Treasury Department, citing a 2018 executive order targeting Venezuela, said it was putting sanctions on six shipping companies that it said were operating vessels that transported Venezuelan oil to Asia, or were obfuscating their locations. The seized tanker, the Skipper, was placed under U.S. sanctions in 2022 for what the Treasury Department said were its ties to Iran. The vessel is about 20 years old, according to S&P Global Energy, and went by another name at the time.

The United States has seized oil before, but the practice is uncommon and rarely becomes a public spectacle, as it did on Wednesday when Mr. Trump confirmed it had happened and Attorney General Pam Bondi posted a video of American forces boarding the ship on social media.

Enforcement actions under the Biden administration and first Trump administration targeted Iranian oil and other fuel. Sanctions also work by deterring many larger shipping companies from getting involved with moving oil from certain countries in the first place.

Venezuela produces less than 1 percent of the oil the world uses, which means that even if its exports were eliminated, it would have little effect on the global energy market. That said, some refineries may struggle because they are most efficient at producing gasoline, diesel and other fuels when they blend unusually thick oil from Venezuela with other, lighter varieties from elsewhere.

Politicians often weigh the benefits of enforcing trade restrictions against the risk that such actions cause oil prices to rise.

Indeed, Wednesday’s seizure had little effect on oil prices, which climbed modestly in the immediate aftermath, but have given up those gains, trading on Friday morning below$58 a barrel.

As well as obfuscating ownership and disguising vessel locations, operators involved in transporting oil from sanctioned countries must take other measures to be successful. They often have to forgo traditional shipping insurance because most insurers are unwilling to violate U.S. and European laws and regulations. As a result, ports in some countries may deny the entry of shadow tankers. To get around those restrictions, dark tankers often transfer their oil at sea to other ships that have the appropriate insurance so the oil can be delivered.

Such practices can make it very difficult to determine the origin of any given barrel of oil.

Not all Venezuelan crude oil is restricted, however. Some of it has been making its way to U.S. refineries legally under a license held by Chevron, the second-largest U.S. oil company.

“It’s not as if this oil travels around the world with a label saying, ‘I am shadow oil’ or ‘I am sanctioned oil,’” said Elisabeth Braw, a senior fellow at the Atlantic Council who studies maritime threats.

Shipping companies now have to spend a lot more time and money to determine that oil is from legitimate sources, Ms. Frangou, the shipping executive, said.

Wednesday’s tanker seizure will also ratchet up pressure on China, which relies on heavily discounted oil from countries like Venezuela and Russia, said Clayton Seigle, a senior fellow at the Center for Strategic and International Studies, a Washington think tank.

“Adding tanker seizures to the tools in the current tool kit will be noticed in Beijing,” Mr. Seigle said.

As dramatic as seizing a ship may appear, other actions, particularly the recent sanctions that Mr. Trump imposed on Russian oil companies, are more likely to cause shadow fleets to shrink, analysts said. In October, the Trump administration imposed sanctions on Rosneft and Lukoil, Russia’s largest oil businesses, a move that appeared to cause a drop in tanker shipments.

“The U.S. is really putting the pressure on Russia on that front,” Mr. Brooks, the Brookings Institution analyst, said.

In an effort to reduce how much money Russia could earn from oil exports, the Group of 7 nations, the European Union and Australia in 2022 imposed restrictions aimed at capping the price of Russian crude at $60 a barrel. The European Union and Britain have since lowered their price target.

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