Sanctions vs profits: Report claims India is slowly expanding dark fleet tanker scrapping. Here is why

Indian ship scrapyards are now accepting more dark fleet vessels, a report said, pointing out that three US-sanctioned tankers had sailed to Gujarat for this purpose.

The Woodchip (IMO: 9018464), sanctioned by the US in 2021 under a different name, is one of the latest such tankers to be brought for scrapping to India, a Bloomberg report said, citing tracking data from officials in the know.

Built in 1993, the Gambian-flagged Suezmax-size vessel is now the oldest sanctioned tanker to be brought to the demolition facility in Gujarat's Alang.

It is also the third tanker to be brought here over the past month, after the Guyanese-flagged Global Star (IMO: 9164500) and the Cameroonian-flagged Bodhi (IMO: 9144782).

The report points out that this growth also reflected marked changes in the composition of global dark fleets—as well as in the nature of shadow fleet operations—as aged vessels slapped with sanctions slowly begin to die out.

This is because many of these vessels have not just reached their age capacity, but have been used well past these limits.

Why accept these legal burdens at all then? The report notes that the declining revenue for local ship scrapyards was the key reason behind the shift, with many seeing it is the only viable way to hold on to this industry.

This comes despite dark fleet vessels bringing along a slew of legal burdens from the countries that sanctioned them—vessels that could possibly have ended up abandoned at sea, posing risks to the environment and/or maritime traffic.

In that regard, the report estimates that the Alang scrapyard would have made more than $110 million for the record 15 sanctioned vessels it received last year, which includes the first-ever very large crude carrier blacklisted by the US.

“Once someone started doing the business, the number started to grow. Those who want to remain have no choice but to buy such vessels,” said Anil Sharma, Founder and CEO of GMS, one of the world's largest companies that specialise in buying and recycling end-of-life ships. He claimed that GMS did not deal in sanctioned vessels.