AT the top of the shipping industry, boards the world over have hit the pause button on any strategic investment decisions.

“We’re waiting to see what happens next” is the standard response from executives.

While few of them anticipate anything liberating to come out of Donald Trump’s Liberation Day announcements regarding tariffs, there is at least the hope that some semblance of clarity will emerge, eventually.

Wait until next week and they may even have some directional understanding of carbon regulation to help clear the mist of uncertainty hanging over global seaborne trade right now.

At the bottom of the industry, things are similarly operating in wait-and-see mode, but with a less clear line of sight on what to look out for to assess their next move.

For all the big talk of maximum pressure, sanctions actions so far have not really created any barrier that has not already been breached elsewhere.

Targeting one Chinese teapot refinery creates headlines, but it is one nimble financial restructure away from keeping the flow of sanctioned oil coming its way.

And yet the would-be circumventers appear to be on hold for the moment.

The usual fleet of idling tankers off Malaysia waiting for illicit ship-to-ship transfers has been growing dramatically of late. Deals are on pause.

Those operations that are moving seems to be changing up the standard practice of transferring oil to non-sanctioned tonnage. What we’re seeing now is an exchange of oil from Iran-associated tankers to those previously engaged in Russian trades.

Whether this is evolution or unintended consequence is not yet clear. Things are changing because nobody is entirely clear in which direction the political wind is blowing at the moment.

If the US is really considering a sanctions package targeting countries that buy Russian oil if president Vladimir Putin refuses to engage in good-faith ceasefire negotiations with Ukraine, then that marks a notable shift.

Designating tankers can be worked around. Designating receiving states with 500% tariffs may sound like more rhetoric, but it is enough to make even China think twice before responding.

Adding pressure on states like Malaysia and Singapore to come off the fence and assist US sanctions — as we hear is happening — could alter the calculus of those would-be circumventers once again. The problem is, they don’t know what happens next — and, until they do, few are willing to make any big bets.

Right now, the US has everyone in shipping on hold.

Richard Meade
Editor-in-chief, Lloyd’s List

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