By Hook or By Crook (or Both): How Iran Beats US Sanctions

Persian Gulf waters off Iraq have become a new, important waypoint for Iranian oil smugglers looking to avoid U.S. sanctions…Iranian tankers now regularly transfer crude to other ships just miles offshore the major Iraqi port of Al Faw, according to the officials. The oil is then mixed with cargoes from other places to disguise its origin, and it eventually ends up on sale in world markets, they say.


In one example from March 2020,  according to a shipping manifest reviewed by The Wall Street Journal, 230,000 barrels of oil from the state-run National Iranian Oil Co. were transferred to a vessel moored in Iraqi waters. The cargo was blended with Iraqi oil and passed to other ships, according to people familiar with the operation. The ultimate destination of the oil wasn’t clear.

The people familiar with the transfer said the operation was part of an increasingly common and lucrative business that involves transferring and mixing cargoes with other vessels multiple times and then selling the oil with documents that declare it is as Iraqi. Iraqi oil can be sold at a significant premium to oil of Iranian origin.

Iran has increasingly tried to find ways to get its crude to market despite the U.S. sanctions. Iran’s daily crude and condensates exports averaged 827,000 barrels a day in the first six months of this year, according to U.S. shipping-information company TankerTrackers.com. That is up 28% from the previous six months, but far below the level of 2.7 million barrels a day in May 2018 before the sanctions.

“We While some of Iran’s oil exports go to countries not aligned with the U.S., such as Syria and China, they often pass through allies such as the United Arab Emirates or Iraq, where their origin is being concealed, according to U.S. officials.

Excerpt from Sarah McFarlane and Benoit Faucon, Iraq Emerges as Hurdle to Enforcing Iran Oil Sanctions, WSJ, Oct. 24, 2020

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