Sanctioned VLCCs stranded outside Bangladeshi port limits
Two VLCCs from the dark fleet that have been taken to the Indian subcontinent for recycling remain outside port limits in Bangladesh.
Two elderly VLCCs which have caught the attention of the US Office of Foreign Asset Control (OFAC) have recently arrived for end-of-life dismantling but remain outside port limits, off Bangladesh, with recyclers unwilling to enter into any deals. The 1997-built Itaugua, which flies the Comoros flag, and the 1996-built Artemis III, registered in Honduras, are effectively in limbo, stranded outside Bangladeshi waters, according to market reports from GMS, the world’s largest cash buyer of end-of-life ships.
The company does not name the tankers, but sources have previously identified them. Itaugua was added to OFAC's Specially Designated Nationals (SDN) list on March 13, 2025 for facilitating Iran's oil trade; Artemis III was designated in December 2022.
There are, however, some questions about Artemis III whose owners, it is thought, may have given up on their plan to recycle the ship. Within the last few days, the tanker has been reported as underway and heading for Mina Saqr in the United Arab Emirates. This has not been confirmed.
The plight of the two tankers raises key questions on how the many hundreds of sanctioned ships that make up the so-called dark fleet will be recycled in the years ahead. Brokers estimate that at least 60% of these vessels, mostly tankers that have shipped cargoes of Iranian, Russian and Venezuelan crude, are more than 20 years old.
Their ownership is shady, their trading history unavailable, and their names and flags are often frequently changed. The size of the dark fleet remains unclear, with estimates ranging from around 600 tankers to more than 1,100. Their disposal over the next few years will cause a substantial challenge.
Meanwhile, a further test for ship recyclers lies in tightening regulation, with the Hong Kong Convention deadline of June 26th just a couple of months away. Many recycling yards in Bangladesh and Pakistan, which is further behind, will not be able to take end-of-life ships until they implement certain facility and procedural improvements and upgrades.
Commenting on last week’s market, GMS notes that dry bulk charter rates declined last week, sparking more interest and recycling enquiries from potential sellers. Pakistani yards took in more ships than India, the company said, although there was a clear decline in the number of recycling candidates arriving during the week.
According to GMS estimates, Bangladeshi recyclers lead the price chart with container ships typically at $485 per ldt, tankers at $475, and bulkers at $455. Indicative prices in Pakistani are ten dollars less across the board, with Indian prices lagging by a further five dollars. There is very little activity in Türkiye at the moment but GMS estimates typical price levels at $300, $290, and $280 across the three ship sectors.
