Why US oil firms are too afraid to unload seized Iranian oil: WSJ
4 Min Read
Analysts believe that Iran's alleged ramped-up seizing of ships and bold maritime activities are payback for Western oil seizures and a blatant failure of US sanctions on Tehran.
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An Iranian flag flutters on board the Adrian Darya oil tanker, formerly known as Grace 1, off the coast of Gibraltar on August 18, 2019. (AP)
According to individuals familiar with the situation, US federal prosecutors are unable to sell nearly 800,000 barrels of seized Iranian oil lying aboard a Greek ship off the coast of Texas, a report by The Wall Street Journal revealed.
Although the coast guard has certified the ship for unloading, the firms that execute those transfers, known as lightering, are too concerned about Iranian retaliation to handle the seized oil.
In April, the US seized the Iranian oil tanker Suez Rajan just days before Tehran detained a tanker carrying American cargo in the Gulf of Oman.
A Houston-based energy executive entangled in the situation admitted that companies "are literally afraid to do it." According to him, numerous companies that were contacted rejected the offer to unload the oil.
Another executive wondered "if anybody's going to touch it."
The standoff over the stolen oil highlights the failure of the US administration in implementing sanctions against Iran, as Tehran has allegedly become bolder, according to the report, in its maritime expeditions, including the Iranian Navy's plans to establish a new naval coalition with Saudi Arabia, UAE, Qatar, Bahrain. and Iraq.
A former US official believes that the current situation represents “a much bigger drama that’s playing out about how we deal with Iranian threats."
A week ago, the Naval Forces of the Islamic Revolution Guard Corps announced that its forces seized a foreign oil tanker carrying one million liters of smuggled oil.
On July 6, the forces of the IRGC 2nd Naval District inspected Nada II-a Tanzania-flagged chemical tanker carrying smuggled fuel.
Brigadier General Ramezan Zirahi recalled that the Americans were forced back in November 2021, during a complex operation in the Sea of Oman, to flee the area "humiliated" with 5 military frigates, a number of fighters, helicopters, and manned and unmanned aircraft.
Read more: Iran Navy blocks US aircraft from entering airspace
Retaliation to Western oil seizures
Some analysts believe that the recent escalated confiscations of smuggled oil are in retaliation to Western oil seizures.
According to US sources, the Pentagon is deploying F-35 fighter jets and a Navy destroyer to the Middle East to prevent Iran from allegedly attempting to hijack oil tankers and to respond to what the US dubbed "Russian aggression" in the region.
An Iranian representative to the United Nations expressed that Iran rejects the allegations made by the US, stressing that Tehran “insists on the security and stability of the Persian Gulf and Strait of Hormuz. However, if oil tankers violate harmless passage, pollute the environment, or smuggle Iranian fuel, Iran does not hesitate to address those irregularities and infringements based on its laws as well as relevant international obligations.”
Iranian state media cited Tehran authorities as saying the Advantage Sweet was detained after it collided with a fishing boat. The owners of the ship did not respond to comment requests.
Mark Wallace, the chief executive of UANI - the United Against Nuclear Iran nonprofit organization - warned that the US would not be able to enforce "oil smuggling sanctions" if the industry was too afraid of Iran.
Sources say the owner sent the tanker to the Texas refinery hub as part of a plea deal, while the Justice Department refused to corroborate that information or explain the delay in unloading the oil.
The State Department declined to comment on the Suez Rajan but stated that penalties are being enforced.
Federal prosecutors and security officials are currently disclosing such seizures as warning to anyone who assists Iran in evading sanctions.
A former US official called the situation "unusual", adding that it was a "mystery" why the tanker has been stationed off the coast for that many weeks.
Last year, the US ordered the seizing of an oil tanker flying an Iranian flag near Greece, while the cargo was stolen and sent to the US through another ship while its owner was charged with evading sanctions.
Tehran later detained two Greek tankers for violating maritime international laws but later released them after several months of investigations.
