Panama Closes Ship Registry to Older Oil Tankers and Bulkers Amid Shadow Fleet Concerns

The Panama Ship Registry will no longer accept the registration of oil tankers or bulk carriers that are more than 15 years old. This decisive action aims to optimize fleet performance, reduce arrest risks, and prevent the entry of vessels from the so-called “ghost fleet” or “shadow fleet”.

According to the Panama Maritime Authority, these shadow fleets primarily consist of aging oil tankers with opaque ownership structures that are often underinsured and employ unsafe practices to circumvent international sanctions, particularly those targeting Russian and Iranian oil shipments.

The new policy was formally communicated through an update to MMN 11/2024, outlining the requirements for the Precheck verification process that all vessels must complete before registering under the Panamanian flag. The decision follows analysis of inspection data showing that 71% of fleet arrests between 2023 and the first half of 2025 involved bulk carriers, general cargo vessels, and oil tankers over 15 years old.

In addition to the age restriction, Panama has enacted further oversight measures, including mandatory quarterly inspections for problematic vessels and enhanced verification of Ship Safety Management Systems.

Panama has faced criticism for its handling of shadow fleet vessels despite removing more than 650 ships from its registry since 2019 as part of efforts to enforce western sanctions. The non-governmental organization United Against Nuclear Iran (UANI) recently claimed that Panama “had not taken sufficient action against sanction violators” and noted that nearly one in five vessels suspected of transporting Iranian oil sail under Panama’s flag.

Panama’s registry is among the world’s largest with more than 8,500 ships. The country has been working to improve its enforcement mechanisms, having withdrawn 214 vessels since implementing faster sanctions enforcement measures last year. Once removed from the registry, vessels can no longer sail under Panama’s flag.

The Central American nation is actively collaborating with the United States on registry matters and has previously signed agreements with other flag states including Liberia and Marshall Islands to share information about vessels rejected due to potential sanctions violations.

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