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In the lawless and violent chaos of the seas off the Arabian Peninsula, Iran is allowed to circumvent U.S. sanctions, maintain oil revenues and fund proxies like the Houthis.
Thursday's seizure of the St. Nikolas oil tanker is a rare example of the Iranian military's direct involvement. It is also seen as retaliation for the US seizing the exact same ship a few months ago.
As the war between Israel and Hamas rages, Iran has accessed billions of dollars in recently released funds
The tanker was previously called Suez Rajan. In April, the US took control of it and ended up offloading a million barrels of Iranian crude oil. It is one of hundreds of tankers that experts say are undermining US sanctions and smuggling Iranian oil.
A cargo ship crosses the Suez Canal, one of the most critical man-made waterways, on December 29, 2023 in Ismailia, Egypt. The Suez Canal remains important to both global trade and the Egyptian economy, even though 154 years have passed since… (Photo by Fareed Kotb/Anadolu via Getty Images / Getty Images)
Lloyd's List Intelligence calls the ships the “dark fleet.” A group of US congressmen used the term “ghost armada”. The fleet consists of between 300 and 560 ships. The common characteristics are anonymous ownership or at least ownership that is difficult to trace. The ships are generally older than tankers used in legitimate trade. They turn off their electronic tracking devices or intentionally obscure their location, especially when loading or unloading sanctioned oil. Most importantly, they engage in a practice called “flag-hopping,” where they look for a poor country that will allow them To and fly its flag for a fee.
“It is these ships that operate and trade outside Western jurisdiction and primarily transport sanctioned oil,” said Michelle Wiese Bockmann, chief analyst at Lloyd's List Intelligence. She says countries selling the use of flags also include Cameroon, Gabon and the Cook Islands. But according to Bockmann, around half of the “Ghost Armada” flags come from Panama.
“Panama does not have the resources to manage every single one of the thousands of ships flying its flag,” says Bockmann.
MAERSK pauses shipping operations in the Red Sea indefinitely
A group of U.S. congressmen (14 Republicans, 1 Democrat) sent a letter to U.S. Secretary of State Antony Blinken urging him to pressure Panama to “remove any ships that are actively evading U.S. sanctions by transporting Iranian oil.” from the flag.”
In this photo published on November 20, 2023, a Houthi fighter stands on the Galaxy Leader cargo ship in the Red Sea. (Houthi military media/Handout via Portal / Portal Photos)
“We call on the administration to enforce existing sanctions and put pressure on those who do business with Iran,” said Republican Rep. Bill Huizenga of Michigan.
The smuggling was successful. In 2019, Iran exported about 400,000 to 600,000 barrels of oil per day. Mark Wallace, former U.S. ambassador to the United Nations and current CEO of United Against Nuclear Iran, says Iran currently exports about 2.4 million barrels of oil per day. The majority of it is sold to China.
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“I think the United States has completely lost the plan for deterrence,” Wallace said. “We have a legal obligation to enforce sanctions against Iranian smuggling. There are currently 300 ships on the seas smuggling Iranian oil. These ships operate with impunity.”
Oil prices fell early in Asian trading on Sunday after the United Arab Emirates and the Iran-aligned Houthi group welcomed a ceasefire that would halt military operations on the Saudi-Yemeni border, easing some concerns about possible supplies would … (Portal / Portal Photos)
However, a US State Department spokesperson tells Fox News that “Iran receives only a fraction of the market price for the oil it can sell because Iran is forced into the black market and has to expend resources to avoid sanctions.”