Defying US sanctions, countries have taken oil from 12 Iranian tankers

Tensions between arch-enemies Iran and the US have soared this year after Washington stepped up its campaign of "maximum pressure" against Teheran.
Tensions between arch-enemies Iran and the US have soared this year after Washington stepped up its campaign of "maximum pressure" against Teheran.PHOTO: REUTERS

WASHINGTON (NYTIMES) - China is receiving oil shipments from a larger number of Iranian tankers than was previously known, defying sanctions imposed by the United States to choke off Teheran's main source of income, an investigation by The New York Times has found.

The Times examined the movements of more than 70 Iranian tankers since May 2, when the US sanctions took full effect.

Twelve of the tankers loaded oil after May 2 and delivered it to China or the Eastern Mediterranean, where the buyers may have included Syria or Turkey. Only some of those 12 tankers were previously known to have recently delivered Iranian oil, and an analyst said the scale of the shipments documented by The Times' investigation is greater than what had been publicly known.

The continued flow of oil underscores the difficulty the Trump administration has had in using sanctions to bring Iranian oil exports to zero after breaking with allies and partners on Iran policy.

The Obama administration had worked with China, Russia and three European allies on the 2015 agreement intended to restrict Iran's ability to pursue a nuclear programme. President Donald Trump's decision to withdraw from the deal and to impose sanctions was opposed by those countries.

"You can't make these kinds of threats if you can't operationalise it," said Mr Richard Nephew, a scholar at Columbia University and a former White House and State Department official who helped enforce Iran sanctions during the Obama administration.

"It adds up to a decision that makes them look weak and feckless," he added. "That shows there are limitations to US power. China and other places are prepared to say, 'No, we're not going to follow the US lead.'"

The Times reviewed data from MarineTraffic and Refinitiv, two ship-tracking services, as well as satellite imagery from Planet Labs and analysis from shipping and energy experts.


"US sanctions have not stopped Iran from moving oil to the Mediterranean and Asia," said Mr Noam Raydan, an analyst at ClipperData, which tracks global crude shipments.

It is not illegal under international law to buy and haul Iranian oil or related products. The Trump administration's oil sanctions, which mainly went into effect in November after the United States pulled out of the Iran nuclear agreement, are unilateral. The administration granted eight governments permission to continue buying Iranian oil despite the sanctions, but ended the exceptions on May 2.

Foreign companies that ignore the sanctions and do business with American companies or banks risk being punished by the US.

US officials have said sanctions are aimed at cutting off money to the Iranian government to force leaders there to make political change, transform their foreign policy and offer more concessions on the country's nuclear and missile programmes.

While Iran continues to export oil, the sanctions have had a substantial impact. In April 2018, before Mr Trump withdrew from the nuclear deal, Iran exported 2.5 million barrels of oil per day. One year later, that figure was at one million. And in June, after the end of the exceptions or waivers, ships in Iranian ports loaded about 500,000 barrels per day, according to Reid I'Anson, an energy economist at Kpler, a London-based company tracking seaborne commodities.

Since the sanctions came into full effect on May 2, low-level hostilities between Iran and the US in the Persian Gulf have increased, despite attempts by European nations to ramp down tensions and get Iran to comply with the nuclear deal, which it had been doing until it breached limits on nuclear fuel last month.

The State Department said any new purchase of Iranian oil after May 2 would be subject to sanctions. "Our firm policy is to completely zero out purchases of Iranian oil," it said.

Japan and South Korea, fearful of secondary sanctions imposed by Washington if they do business with Iran, have complied with the US sanctions. Turkish officials said in late May that they are halting imports of Iranian oil but do not agree with the US sanctions.

In July, the British marines and port authorities in Gibraltar seized a supertanker that they said was carrying crude oil from Iran to Syria. Though the Europeans do not endorse the US sanctions on Iran, the shipment violated European Union sanctions against Syria.

The Trump administration is starting to intensify sanctions enforcement to try to end the exports to China, which continues to be the largest buyer of Iranian oil. On July 22, Secretary of State Mike Pompeo announced sanctions against Zhuhai Zhenrong, a Chinese state-owned enterprise, and its top executive Li Youmin, for "violating US restrictions on Iran's oil sector."

"We have a pretty good lead on where these ships are moving around," Mr Pompeo told Bloomberg TV on July 25. "Wherever we find violations, we will do our level best to enforce them completely and thoroughly."

But that does not satisfy some Republican members of Congress who are national security hawks.

"While I'm glad the administration sanctioned an initial round of Chinese actors, it must step up strong enforcement to deter Chinese and other foreign actors from violating US sanctions against Iran," said Senator Marco Rubio, a Republican from Florida. "The Iranian regime has blatantly shipped millions of barrels of oil to China."

To really tighten the screws on China, the Trump administration would need to punish the People's Bank of China or other Chinese banks that engage in transactions with the Central Bank of Iran, Mr Nephew said. The US could also penalise the energy giant Sinopec, which, like Zhuhai Zhenrong, imports oil from Iran.

But sanctioning the banks or Sinopec would have far-reaching consequences for global trade and deepen the divide between Washington and Beijing. The two nations are already embroiled in a bitter trade war and at odds over global security issues, and Mr Trump is eager to reach a trade deal with President Xi Jinping of China.

A Chinese Foreign Ministry spokesman, Mr Geng Shuang, said on July 19 that the Trump administration's "maximum pressure" campaign against Teheran was the "root cause of the current tensions" involving Iran and that Washington should "correct its wrongdoing".

Before the end of the sanctions exceptions May 2, China had been importing 500,000 barrels per day of Iranian oil. In the past month, China's imports have dropped to about 360,000 barrels per day, according to Kpler.

The National Iranian Tanker Co, which is specifically targeted by US sanctions, owns or manages 11 of the 12 tankers.

In the case of Devrez, an Iranian-managed oil-product tanker, its owner was listed as Great Sparkle Investments, which is registered in Hong Kong but has an office in Mumbai, according to the International Maritime Organisation website. The tanker likely discharged its cargo in early June, I'Anson said.

When they travel, Iranian tankers sometimes turn off their automatic identification system, making them harder to track, said Mr Tom Kenison, an analyst at FGE, an energy consultancy.

Several Iranian tankers stopped reporting their positions after they crossed the Suez Canal, but shipping data suggests they unloaded their cargo in the Eastern Mediterranean. Destinations could include Syria or Turkey, analysts said.

The Times was able to estimate when and where a tanker offloaded its cargo by using data for each ship's position and draft, or how high it was riding in the water. The draft indicates whether a ship is loaded.

Some of the Iranian ships have been previously identified in reports by Reuters, Bloomberg and, which uses satellite technology to monitor ships.

Since June, at least three ships have taken iron ore from Iran to China, I'Anson said, which could also be a violation of US sanctions.

Other Iranian tankers are waiting in the Persian Gulf loaded with crude oil, ready to move when they can find a buyer, he said. Iran is selling some of the oil at a discount.

Some countries watching the continuing imports of Iranian oil by China might start pressuring the Trump administration to grant them exceptions, Mr Nephew said. Or they might decide to just go ahead and buy the oil, perhaps in secret. In June, after a meeting with Prime Minister Shinzo Abe of Japan, President Hassan Rouhani of Iran said Mr Abe told him that "Japan was interested in continuing to buy Iran's oil."