GMS Wins First US License to Recycle 4 Iranian-Linked Tankers as Shadow Fleet Risks Spill
Updated
Updated · Financial Times · May 31
GMS Wins First US License to Recycle 4 Iranian-Linked Tankers as Shadow Fleet Risks Spill
3 articles · Updated · Financial Times · May 31
Four sanctioned vessels tied to Iranian oil trader Mohammad Hossein Shamkhani became the first shadow-fleet ships cleared by the US Treasury’s OFAC for recycling, giving GMS a test case after a seven-month approval process.
More than half of roughly 1,500 shadow-fleet oil and product tankers may now be corroding toward scrap age, GMS chief Anil Sharma said, warning that blocked recycling routes and poor maintenance are raising the risk of a major spill.
High oil prices and the Gulf crisis have kept owners running these older ships longer, while many sanctioned vessels remain uninsured, badly maintained and operated through opaque ownership structures that complicate legal scrapping.
The Strait of Hormuz closure has also slowed shipbreaking by diverting tankers into oil storage, but GMS expects recycling demand to jump if the waterway reopens and trapped vessels can discharge cargoes.
With sanctioned ships heading for scrapyards, how will Iran and Russia adapt their lucrative shadow fleet operations?
Is legally dismantling the 'shadow fleet' a true environmental solution, or just a profitable new venture for the industry?
A US license allows scrapping the 'shadow fleet.' Can this new legal path prevent a looming environmental catastrophe at sea?
U.S. Treasury’s Landmark Permit: Legal Pathways for Recycling Sanctioned Vessels and the Future of the Shadow Fleet
Overview
In April 2026, Dubai-based GMS made history by securing the first U.S. permit to buy and scrap four container ships under Iran-related sanctions. This groundbreaking license from the U.S. Treasury’s Office of Foreign Assets Control marks a turning point in dealing with the growing 'shadow fleet'—vessels trapped by sanctions and operating outside normal regulations. By authorizing GMS to recycle these ships, the U.S. has created a new, regulated pathway for disposing of sanctioned assets, offering a practical solution to a complex global problem and setting a precedent for future management of similar vessels.