US seizes Iranian oil tankers as talks over easing sanctions drag on

Vessels being held on suspicion of illegal shipments of crude

An Iranian oil tanker similar to the vessel pictured has been intercepted by US authorities. Reuters

The US has seized two tankers suspected of transporting Iranian oil as part of a sanctions-busting scheme involving forged documents and the repainting of a ship’s deck to conceal illegal shipments.

Details of the seizure were contained in a federal civil case after the Greek-managed vessels discharged their cargo, worth more than $38 million, in Houston and the Bahamas at the direction of the US, AP reported.

The incident comes as President Joe Biden's administration seeks to revive the 2015 nuclear deal with Iran that would most likely entail the US lifting sanctions. Talks have been made more urgent by President Vladimir Putin’s attack on Ukraine and the US decision to retaliate by banning all Russian oil imports.

The ban potentially removes from western markets more than 10 million daily barrels of oil. Some of that lost supply could be made up by Iran, which pumped an average 2.4 million barrels a day last year.

Tehran has been able to sell less than half of what it produces because of the sanctions.

An oil tanker flies the flag of Iran. Reuters

The journey that led to the ships being intercepted began in the autumn 2020, when the M/T Stark I, an Iranian-owned vessel under US sanctions since 2018, repainted its deck as a means of disguise and to avoid detection by satellite.

On October 31 that year, it pulled into a terminal at Kharg Island, Iran, and loaded oil.

Four days later, 733,876 barrels were transferred at sea to another tanker, the M/T Arina.

During the transfer, both vessels turned off their transponders — a mandatory safety device on all large ships — to avoid being picked up on tracking databases, satellite imagery and data showed.

Key to the smuggling operation are dozens of privately owned, foreign-flagged tankers — nicknamed a “ghost armada” — that use various sophisticated techniques to hide their movements.

In a cat-and-mouse world, ship-tracking technology has boosted efforts to detect sanctions-evading behaviour by Iran as well as Venezuela, whose oil industry is also under US export restrictions.

But seizing oil shipments is rare: before this incident it had been done only twice before.

The Panama-flagged Arina — whose last listed manager was Saint James Shipping, based in Athens — had previously been known to illegally ship Iranian crude, US attorneys allege in a civil complaint filed in a Washington federal court.

Saudi Arabia's Foreign Minister Prince Faisal bin Farhan with the Chancellor of Austria Sebastian Kurz. SPA

Wang Qun, China's ambassador to the UN, waits for the start of talks on reviving the 2015 Iran nuclear deal in Vienna. Reuters

European External Action Service deputy secretary general, Enrique Mora, and Iranian Deputy Foreign Minister, Abbas Araghchi, attend the summit in Vienna. Reuters

The Bushehr nuclear power plant in Iran. AP Photo

Russia's governor to the International Atomic Energy Agency, Mikhail Ulyanov, updates journalists outside the Grand Hotel Wien after a round of closed-door nuclear talks in Vienna. AFP

Abbas Araghchi after negotiations come to nothing. EPA

Enrique Mora speaks to the press outside the Grand Hotel Wien where talks were held. AFP

Stephan Klement, EU Ambassador and Special Adviser on Iran Nuclear Issue, attended the talks aimed at reviving the 2015 nuclear deal. EPA

Qun Wang addresses the media in Vienna. EPA

Iran's Governor to the International Atomic Energy Agency (IAEA), Kazem Gharib Abadi is returning to the 'Grand Hotel Wien' during the closed-door nuclear talks in Vienna. AFP

The Grand Hotel Wien held a series of negotiations designed to revive the 2015 nuclear pact. AFP

Earlier in 2020 and again on its latest suspect voyage, false documents were created to show crude transported by the ship had originated in Oman, prosecutors allege.

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

Throughout the voyage the ship’s managers failed to find a buyer for the Iranian oil.

On August 26, 2021 it transferred 220,793 barrels to the M/T Nostos, off the coast of Cyprus, the complaint alleges.

Both the Arina and the Nostos then tried to discharge the oil at a depot in Turkey, Jungman says.

Instead, they were detected by US authorities and ordered to unload their cargo, which the Nostos did in Houston around Thanksgiving last year and Arina more recently, in January, in the Bahamas, Jungman says.

Iranian officials have suggested they have been able to sell crude oil despite American sanctions.

The Central Bank of Iran issued statistics in early February suggesting it made $18.6 billion in oil sales in the first half of this Persian year, as opposed to $8.5bn in the same period last year, the state-run IRAN newspaper reported.