US seized Iran oil cargo as Biden considers easing sanctions

Mar 10, 2022, 2:30 PM | Updated: 7:13 pm

MIAMI (AP) — The U.S. has quietly seized the cargo of two tankers suspected of transporting Iranian oil as part of an elaborate sanctions-busting scheme involving forged documents and the repainting of a ship’s deck to cloak illegal shipments.

Details of the seizure, which has not been previously reported, were contained in a federal civil case unsealed last month after the Greek-managed vessels discharged their valuable cargo, worth upward of $38 million, in Houston and the Bahamas at the direction of U.S. law enforcement.

The seizure comes as the Biden administration seeks to revive a 2015 nuclear deal with Iran that would likely entail the U.S. lifting punishing sanctions. That task has been made more urgent by Vladimir Putin’s invasion of Ukraine and the U.S. decision to retaliate by banning all Russian oil imports, which potentially removes from Western markets more than 10 million barrels per day of oil. Some of that lost supply could be made up by Iran, which pumped an average 2.4 million barrels per day in 2021 though due to sanctions has been able to sell less than half of what it produces.

Opponents of Iran warn that even as Ukraine scrambles geopolitical calculations and the U.S. turns its attention to Russia, the Biden administration shouldn’t take pressure off the Islamic Republic. The country is considered by the U.S. a state sponsor of terrorism and the Islamic Revolutionary Guard Corps, an elite military unit that plays a key role in the oil industry, a supporter of Hezbollah and other militant groups active throughout the Middle East.

“This seizure serves as a perfect example of why the U.S. should not lift sanctions,” said Claire Jungman, the chief of staff at the New York-based group United Against Nuclear Iran, which closely tracks Iran’s crude shipments. “We should continue to work to ensure that the IRGC cannot use profits from its sale of Iranian oil to fund terrorism and other activities that threaten the safety and security of all Americans.”

The long odyssey that led to the U.S.’ seizure began in the fall of 2020 when the M/T Stark I, an Iranian-owned vessel under U.S. sanctions since 2018, repainted its deck in an apparent attempt to disguise the vessel and avoid detection by satellite imagery. On Oct. 31, 2020 it pulled into a terminal at Iran’s Kharg Island and loaded full of oil.

Four days later, on Nov. 3, 2020, 733,876 barrels of oil were transferred at sea to another tanker, the M/T Arina. During the dangerous ship-to-ship transfer, both ships turned off their transponders — a mandatory safety device on all large ships — to avoid being picked up on ship tracking databases, satellite imagery and data shared by Jungman show.

Despite U.S. sanctions, Iran has seen a windfall of revenue as oil prices have risen over the past year. Key to the smuggling operation are dozens of privately owned, foreign-flagged tankers — dubbed a “ghost armada” by Jungman’s group — that deploy a variety of sophisticated techniques to hide their movements. Even U.S.-owned tankers, such as one belonging to a subsidiary of private equity giant Oaktree Capital Management, have been implicated in the brisk, black market trade.

In a cat and mouse world, ship tracking technology has given a boost to efforts to detect sanctions-evading behavior by Iran as well as Venezuela, whose oil industry is also under U.S. export restrictions. But seizing oil shipments is rare: prior to this latest action it had been done only twice before. Proceeds from the sale of forfeited cargoes partly go to compensate American victims of terrorism.

The Panama-flagged Arina, whose last listed manager is Athens-based Saint James Shipping Ltd., had previously been known to ship illegal Iranian crude, U.S. attorneys allege in a civil complaint filed in Washington federal court. Earlier in 2020 and again on its latest suspect voyage false documents were created to show crude transported by the ship originated in Oman, prosecutors allege.

It was not possible to contact Saint James Shipping and a website believed to belong to the company was not working.

From there, the Arina set course for the Suez Canal but experienced numerous delays along the voyage. Eventually, it proceeded to Istanbul, Turkey, where it underwent repair work, and then Romania, according to ship tracking data analyzed by Jungman.

Throughout the voyage the ship’s managers failed to find a buyer for the Iranian oil. Then on Aug. 26, 2021 it transferred part of its cargo — approximately 220,793 barrels — to another ship, the M/T Nostos, off the coast of Cyprus, prosecutors allege in their complaint. Piraeus-based Eurotankers, the last listed manager of the Liberia-flagged Nostos, did not immediately reply to an email nor did it answer a phone call seeking comment.

Both vessels — the Arina and Nostos — then tried to discharge the oil at a storage facility in Turkey, according to Jungman. Instead, they were detected by U.S. authorities and ordered to unload their cargo, which the Nostos did in Houston around Thanksgiving last year and Arina more recently, in January, in Bahamas, according to Jungman.

Iran’s 2015 nuclear deal with world powers saw it regain the ability to sell oil openly on the international market. But in 2018, then-President Donald Trump unilaterally withdrew from the accord and re-imposed American sanctions. That slammed the door on much of Iran’s lucrative oil trade, a major engine for its economy and its government.

But in recent months, Iranian officials have been suggesting they’ve been able to sell crude oil anyway around American sanctions. The Central Bank of Iran issued statistics at the start of February suggesting it made $18.6 billion in oil sales in the first half of this Persian year, as opposed to $8.5 billion the same period last year, according to the state-run IRAN newspaper.

Follow Goodman on Twitter: @APJoshGoodman

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

US revises up last quarter’s economic growth to 2.9% rate

WASHINGTON (AP) — Despite high interest rates and chronic inflation, the U.S. economy grew at a 2.9% annual rate from July through September, the government said Wednesday in a healthy upgrade from its initial estimate. Last quarter’s rise in the U.S. gross domestic product — the economy’s total output of goods and services — followed […]
8 hours ago
Associated Press

Venezuelan publisher receives award from US book association

NEW YORK (AP) — One of Venezuela’s few remaining independent publishers is being honored by the Association of American Publishers, the trade association announced Wednesday. Editorial Dahbar, which publishes books that include interviews with political prisoners and critiques of the country’s criminal justice system, has been given the AAP’s International Freedom to Publish/Jeri Laber Award. […]
8 hours ago
Associated Press

Germany quits energy treaty, says it hampers climate goals

Germany has formally decided to abandon an international energy accord that fossil fuel companies had used to oppose measures against climate change, the country’s energy minister said Wednesday. The move follows similar decisions by Italy, France, Spain and other European countries to leave the 1998 Energy Charter Treaty, which includes provisions designed to protect foreign […]
8 hours ago
Maryland Gov. Larry Hogan speaks at an annual leadership meeting of the Republican Jewish Coalition...
Associated Press

Hogan to gather with supporters amid White House speculation

ANNAPOLIS, Md. (AP) — Term-limited Maryland Gov. Larry Hogan was holding fundraisers for future political activity Wednesday at events where the Republican is expected to talk about his eight years as governor, as well as plans for the future. Hogan, who leaves office in January, has positioned himself to run as a legitimate alternative to […]
8 hours ago
Lightning brightens the evening sky in Jackson, Miss., Tuesday, Nov. 29, 2022. Area residents were ...
Associated Press

Tornado threat continues as southern towns assess damage

JACKSON, Miss. (AP) — Tornadoes damaged numerous homes, destroyed a fire station, briefly trapped people in a grocery store and ripped the roof off an apartment complex in Mississippi and Alabama. Two deaths were reported as the storm front continued to threaten parts of the Deep South on Wednesday. The National Weather Service had warned […]
8 hours ago
Associated Press

Germany seeks to boost immigration of skilled workers

BERLIN (AP) — The German government said Wednesday that it plans to ease entry rules for immigrants from outside the European Union to help meet Germany’s demand for skilled workers. Experts say Europe’s biggest economy needs about 400,000 skilled immigrants each year as the country’s ageing workforce shrinks, particularly to fill vacancies in the health […]
8 hours ago

Sponsored Articles

...
Quantum Fiber

How high-speed fiber internet edges out cable for everyday use

In a world where technology drives so much of our daily lives, a lack of high-speed internet can be a major issue.
...
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.
...
Quantum Fiber

How high-speed fiber internet can improve everyday life

Quantum Fiber supplies unlimited data with speeds up to 940 mbps, enough to share 4K videos with coworkers 20 times faster than a cable.
US seized Iran oil cargo as Biden considers easing sanctions