According to Bloomberg, Indonesia is gearing up to auction the detained Very Large Crude Carrier (VLCC) Arman 114 along with its cargo of crude oil, establishing a minimum bid of $70 million. This initiative is being managed by the Attorney General’s Office amidst ongoing U.S. sanctions against the vessel.
The Iranian-flagged tanker was captured in 2023 after it reportedly attempted an oil transfer between ships in Indonesian waters, resulting in some spillage during the process. Currently, it is docked at Batu Ampar port located in Batam.
The auction price encompasses not only the supertanker-built in 1997-but also approximately 167,000 tonnes of light crude oil onboard. While officials have not disclosed details about the oil’s origin, tracking data from Kpler and Vortexa suggests that it was loaded with Iranian crude prior to its seizure.
Bidders should be aware that they will assume responsibility for maintenance and security costs post-purchase and must relocate the vessel within a month after acquiring it. However, specifics regarding how buyers should manage either the ship or its cargo following sale remain unclear.
Industry experts note that a brand-new VLCC typically commands around $126 million on the market today; conversely, a vessel aged around fifteen years might sell for about $59 million. Interestingly, older tankers earmarked for dismantling could fetch roughly $16 million-a fact that underscores Indonesia’s unique pricing strategy despite including valuable crude oil.
This move comes as global shipping entities grapple with an expanding “dark fleet” comprising sanctioned vessels transporting crude from nations like Iran and Venezuela. A recent analysis by BRS Shipbrokers indicated that nearly 80% of approximately 1,140 tankers within this fleet are under sanctions-a figure likely exacerbated by new regulatory measures from Western governments.
Legitimate scrapyards have largely steered clear of purchasing sanctioned vessels due to fears surrounding secondary sanctions; however, there has been an uptick this year in scrapping U.S.-sanctioned tankers in India through unregulated channels and opaque financial arrangements.
