Iraq’s waters have become a new, important waypoint for Iranian oil smugglers looking to avoid US sanctions. (AFP)

October 26, 2020

Iraq’s waters have become a new, important waypoint for Iranian oil smugglers looking to avoid US sanctions, American officials and documents have revealed.

Iranian tankers now regularly transfer crude to other ships near the major Iraqi port of al-Faw, the Wall Street Journal cited official sources as saying.

The oil is then mixed with cargoes from other places, including Iraq’s crude oil, to disguise its origin, and it eventually ends up on sale in global markets.

With time, the operation has become 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.

Despite the significant decline in crude oil production after the US reimposed its sanctions on Tehran, the country still exported more than 800,000 barrels per day in the first six months of this year, according to US shipping-information company TankerTrackers.com.

With the 25-year deal with China now moving ahead at pace, Iran has a buyer for all of the crude oil it can produce, albeit at discounted levels, Simon Watkins told OilPrice.com in late September.

Watkins quoted a source close to the Iranian Oil Ministry as saying that from June 1 to July 21, China imported at least 8.1 million barrels of crude oil – 158,823 barrels per day (bpd) – from Iran by disguised ship-to-ship transfers. However, China claimed it did not import any crude oil from Iran in June.

In September, TankerTrackers reported that Iran’s oil exports have jumped up to 1.5 million barrels per day, a figure much higher than the stated official data.

“The amount of the exports of petroleum products in Iran has been unprecedented,” Iran’s Oil Minister Bijan Namdar Zanganeh said in August.

Former US special representative for Iran Brian Hook stressed that the United States has been so successful at collapsing Iran’s oil sector because it enforced its sanctions. “We have warned the maritime community for two years of the dangers of moving Iranian oil.”

Asharq Al-Awsat

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.