Effect of geopolitics on shipping poised to escalate, so ‘buckle up’
GEOPOLITICS has played a role in shipping since cargo moved in barrels and sacks on sea galleons, but never at the scale it does today.
The global fleet has never been larger, the volume of ocean cargo has never been higher, and state actors have never been more intent on using shipping as a geopolitical lever.
The effect of geopolitics on shipping — already acute — is poised to escalate, according to speakers at the Hellenic American-Norwegian American Chambers of Commerce (HACC-NACC) conference in New York on Tuesday.
“This is not a spectator sport. The threat is real,” said Brian Green, vice president of maritime at International Registries Inc, which manages the Marshall Islands flag. “It has evolved dramatically, specifically for the maritime space, both from a conventional and non-conventional perspective.”
“What I would stress is that we’re just in the middle of the story,” said Joshua Tallis, advisor to the chief of naval operations at the Center for Naval Analyses. “We don’t know how the story will end.”
Escalating actions targeting maritime
“Every five minutes, it seems another hotspot is bubbling up,” said John Stratakis, partner at Poles Tublin Stratakis & Gonzalez.
Following the Houthi attacks on ships in the Red Sea in 2023-2025, and attacks on vessels in the Black Sea by both Russia starting in 2022 and Ukraine in 2025, the US has aggressively moved against shadow fleet* tankers serving Venezuela since in December 2025.
The US has blocked exports of sanctioned Venezuelan cargoes, captured former Venezuelan president Nicolas Maduro and seized eight tankers through this month (six in the Caribbean, one in the North Atlantic, one in the Indian Ocean).
“We’ve traditionally seen the US as the protector of the shipping lanes,” said Stratakis. “There’s now concern that some of the US actions may be threatening the free passage of ships around the world — the US, of course, sees it differently.”
Dane Inglis, principal of Rystad Energy, said, “We see an increasingly disparate world with the US no longer a custodian of global trade, as such.”
According to Green, “I would describe the Maduro capture as a true paradigm shift, from the standpoint of regional influence rebalancing in the Western Hemisphere as well as the sanctions landscape.”
“Policymakers in both the US and the EU have awoken to the reality that they can pull the maritime sanctions lever,” said Tallis, who was offering his personal views, not those of the Department of War.
“The US has been applying international sanctions in the banking and hydrocarbons space for decades, but it has only been in the last five years or so, particularly since the Russian invasion of Ukraine, that policymakers on both sides of the Atlantic have realised that they can leverage this resource, which has created an action-counteraction dynamic that we’re still in the middle of.”
Risks of further escalation
America’s aggressive move against Venezuela will have knock-on effects across the global shadow fleet network.
According to Tomer Raanan, maritime risk analyst at Lloyd’s List Intelligence, Venezuelan crude that previously went on shadow tankers, primarily to China, should now move on compliant tonnage. As a result, “the shadow fleet will be competing in a smaller market, really just Russia and Iran”.
The new EU and UK sanctions package under consideration could effectively ban most mainstream tankers from the Russian trade. The general trend, said Claire Grunewald, co-founder of Clarity Compliance Consulting, is that “Russian oil is becoming untouchable” for Western shipping.
This increases demand for shadow tankers for Russian exports. “Luckily for Russia, there are all the ships that are no longer trading in Venezuela that could plug some of those gaps,” said Raanan.
Russia still has an ample outlet for its crude in China.
“Despite pressure from the US on India, what we see is that China has taken up the slack,” said Inglis. “China has proven very willing to take all of the volume that is uninvestable to the rest of the world.”
Meanwhile, false-flagged (stateless) shadow tankers are proving vulnerable to seizures under UNCLOS Article 110. In addition to the US, false-flagged tankers have recently been seized by France and India.
This is driving a move towards more Russian flagging. “Before there was the flight to suspect registries or lax registries. Now we’re starting to see the movement to just registering with Russia,” said Tallis.
If Russian crude exports continue to flow to China, most of this volume goes on shadow tankers, and more of those ships are Russian-flagged, does that keep Russian flows in the clear from Western intervention, or does it raise the risk of a more serious geopolitical issue if there is a sustained Western intervention?
“My fear is that we end up in a circumstance eventually where you have a more bifurcated maritime system,” said Tallis. “There’s a Western system and there’s a system that’s more immune to Western sanctions.
“There are pros and cons to that. It insulates either system from its counterpart a bit more, but it may lower the threshold or barrier to action for either side.”
Different viewpoints add to uncertainty
Part of the shipping market volatility created by geopolitics is due to state actors like the US government not understanding the nuances of the commercial shipping market, and having goals that supersede commercial consequences.
Tallis explained, “The Navy spends day in, day out providing for the national prosperity of the United States by securing the international commons, but spends very little time at a strategic level understanding the pressures and demands of the commercial maritime economy.”
For example, US military strikes on the Houthis in 2025 did not bring commercial shipping back to the Red Sea, due in part to high insurance costs.
“From a Navy standpoint, the sort of kneejerk instinct was to say, ‘Well, we’re shooting down missiles, the odds on an individual ship getting hit are actually relatively low, so we’ve solved the problem, right?’ The US Navy doesn’t really have the domain expertise on the pressures from maritime insurance rates and war risk insurance,” he explained.
“They also didn’t understand the fact that longer routes were kind of a boon, because they solved the problem coming out of the overcapacity [of containerships] after Covid. These are not things on the US Navy’s mind.”
Iran is another potential geopolitical flashpoint for shipping that could be imminent.
Tallis said, “With scenarios like Iran, the Navy understands, at the top line, that the Strait of Hormuz is a critical chokepoint for the movement of oil. But from a narrower standpoint — is there a backup plan in the wings similar to the 1990s tanker wars? — to me, that is a much less central part of how the Navy thinks of its primary mission, which is: in the event of a war, to win the war, not protect the folks in this room.
“It's the same thing in for the contingency in the Indo-Pacific,” he said, referring to the threat of a Chinese invasion of Taiwan.
“The number-one job of the US Navy as part of the joint forces is to win the war. I’m not entirely sure that our respective communities have had enough conversations where we all equally understand who’s doing what in those kinds of scenarios.”
Concerns over possible US-China conflict
At previous shipping conferences, executives have dubbed a future armed conflict between the US and China over Taiwan as the proverbial “big one”.
There has already been some shipping market fallout, albeit limited, following the brief imposition on US port fees on Chinese ships and foreign-built car carriers in 2025 (which were suspended in the US-China trade détente) .
Those fees were meant to raise money to support US shipbuilding, and in the case of car carriers, incentivise US yard orders. The US shipbuilding drive, in turn, is tied to future conflict risks in the Pacific and elsewhere.
According to Darrell Conner, government affairs counsellor at K&L Gates, “As commercial operators, we look through the lens of being a conveyance to transport something as cheaply and inexpensively as possible from point A to B.
“But the US government has a different objective in mind. It has a national security imperative. If you look at where we are today as a nation, and our ability to project overseas, we are woefully inadequate, whether that’s ships, seafarers or shipbuilding, and as a result, the US government comes at this from a very different perspective.
“We cannot, in the tyranny of distance between the US and the Pacific, protect our interests, and that is truly what is driving the conversation in the United States right now on policy with respect to shipbuilding, ships and manpower,” said Conner.
Tallis said, “If we went to war, we obviously don’t have the flag capacity we need to move goods to sustain a protracted conflict of a scale that may unfold. The challenge is that the market has voted with its feet: it is not cost-competitive right now, based on current conditions, for the United States to rapidly scale up its commercial maritime industrial base — and so, enter the need for concerted industrial policy.”
That nascent industrial policy led to the port fees, as well as mooted plans for cargo preference rules to support US shipbuilding.
Tallis also warned of another potential shipping impact related to US-China tensions.
“China, just over Christmas, unveiled its capacity to load containerships with portable weapon systems. As we move towards the containerisation of weapons systems, and we continue the conversation on dual-use maritime infrastructure, I think there’s actually much worse to come.
“Because right now, most of what we’ve seen has been isolated to the tanker space. With the rest of the commercial maritime system and the container apparatus, I think we’ve only seen the tip of the iceberg in terms of the intersection between merchant traffic and global maritime security concerns for the US and its allies and partners.”
According to Green, “There are Chinese commercial vessels now with missile launchers. That is significant. If you look at China’s strategic doctrine, it talks about China-affiliated vessels being subject to military requisition as well as being built to defence standards. This is significant.
“So, what I would say to everyone here about the next five years is: buckle up and maintain due diligence, because this is going to be a wild five years.”
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