Washington increases pressure on Iranian oil

The US government has sanctioned a network of shipping companies and nine vessels for allegedly smuggling Iranian oil disguised as Iraqi oil.

IMAGE: Getty Images

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on several vessels that have covertly blended Iranian oil with Iraqi oil, which is then deliberately sold as exclusively Iraqi-origin to circumvent sanctions.

This network of shipping companies is led by Iraqi-Kittitian businessman Waleed al-Samarra’i, OFAC said. His network generates about $300 million of value to Iran and its partners every year, OFAC added.

The US Treasury Department has imposed sanctions on two UAE-based firms – Babylon Navigation and Galaxy Oil – along with five Marshall Islands-registered shell companies, all linked to Al-Samarra’i.

Additionally, OFAC has targeted Liberia-flagged ADENA, LILIANA and seven other vessels, all operated by Babylon Navigation, for blending Iranian and Iraqi oil at sea, via ship-to-ship (STS) transfers in the Arabian Gulf and Iraqi ports.

“To obscure their activity in smuggling Iranian oil, Al-Samarra’i’s vessels use ship-to-ship transfers with U.S.-sanctioned vessels publicly affiliated with Iran’s shadow fleet to distance themselves from direct interactions with the Iranian petroleum sector,” OFAC claimed.

OFAC has further alleged that these vessels engage in other obfuscation techniques to hide their activities, like unsafe STS transfers after daylight hours, Automated Identification System (AIS) spoofing, and conspicuous gaps in AIS location reporting.

By assembling a shadow fleet of poorly maintained vessels to circumvent sanctions meant to restrict the movement of Iranian crude oil, Tehran has effectively generated thousands of dollars in revenue to support regional armed groups, including the Yemen-based Houthi and the Lebanon-based Hezbollah, according to OFAC.

The move reinforces the Donald Trump-led US administration’s commitment to tightening sanctions on Iran as it pushes to bring the OPEC member’s oil exports down to zero.

The price of front-month ICE Brent found some support after “the US unveiled a fresh round of sanctions against a network moving Iranian oil,” VANDA Insights’ remarked founder Vandana Hari.

By Aparupa Mazumder

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