Iran Sold Oil Wanted by U.S. But Doesn't Know Where It Is Going

By Arsalan Shahla and Mahmoud Habboush

Iran said it sold an oil cargo on board a contested tanker sailing the Mediterranean Sea but didn’t know where the vessel was going amid U.S. efforts to block delivery of the crude.

The Adrian Darya 1, the tanker that the U.S. sought to seize in Gibraltar last week, was sailing more than halfway into the Mediterranean Sea on Monday without declaring any destination. Iran didn’t identify the buyer of the roughly 2 million-barrel cargo.

The buyer will determine where the oil is delivered, Iranian government spokesman Ali Rabiei said announcing the sale. He didn’t say when Iran sold the crude in comments carried by state-run IRNA news agency.

Iran’s tanker fleet is under intense scrutiny as the U.S. seeks to cut off the Islamic republic’s ability to sell crude, normally the country’s main export earner. Iran’s oil sales have tumbled under U.S. sanctions threatening to punish most interactions with the Iranian government over its nuclear program.

French President Emmanuel Macron renewed efforts over the weekend to save the 2015 nuclear agreement with the Islamic Republic. Both Iran and other signatories to the deal oppose the U.S. President Donald Trump’s tougher measures and Macron proposed allowing the Middle Eastern producer to sell more crude in exchange for returning to full compliance with the agreement. Macron discussed the idea in meetings with Trump and Iranian Foreign Minister Javad Zarif in Biarritz, the site of the Group of Seven summit.

Those discussions would likely do little to solve the immediate problem of the Adrian Darya 1. The Trump Administration is seeking to block the tanker’s voyage by threatening sanctions to stop the ship from being able to call in any port or offload any oil.

The tanker on Sunday changed the signal sent from the vessel’s satellite transponder to “For Order,” a designation meaning the ship isn’t disclosing any destination, according to Bloomberg tanker-tracking data. The Adrian Darya 1, which last week changed names from Grace 1, was sailing south of the Greek mainland, according to tanker-tracking data.

The ship had on Saturday signaled Turkey’s port of Mersin, switching from the previous target of Kalamata in Greece. Greek officials said the ship would be unwelcome after the U.S. threatened sanctions against anyone aiding the tanker, while a stop in Turkey would also pose complications in an already fraught relationship.

The vessel may seek to transfer the crude to smaller ships for delivery to Turkey or Syria and could “go dark,” turning off its satellite transponder to mask the location of any unloading. The vessel’s current trajectory could lead to any of the ports in the eastern Mediterranean or, potentially, to the Suez Canal.

The Aryan Darya 1 wouldn’t be able to transit Suez without offloading some of the oil on board since a fully laden tanker of that size would sit too deep in the water to make the passage. The Suez Canal leads to the Red Sea and from there the vessel could sail on to the Persian Gulf and Iran.

A U.S. attempt to seize the tanker before leaving Gibraltar was denied by a court in Gibraltar. A court in the territory refused the petition from the American government since, while European Union rules prohibit dealing with sanctioned entities in Syria, they are less comprehensive than U.S. sanctions law with regards to Iranian oil sales.

Photo: Bloomberg

Iran Warns U.S. Against Seizing Oil Tanker Headed to Greece

By Arsalan Shahla, Verity Ratcliffe and Brian Wingfield

Iran warned the U.S. against apprehending a supertanker carrying the Middle East country’s oil and said it couldn’t be clear on the ship’s ultimate destination, leaving the fate of the vessel uncertain as it sailed into the Mediterranean Sea from Gibraltar, where it had been detained.

The tanker, formerly called the Grace 1 and re-named the Adrian Darya 1, was signaling Kalamata, Greece—at least for now—with an arrival date of Aug. 26, according to tanker-tracking data compiled by Bloomberg at 5:25 p.m. London time. It had previously been showing an arrival date of Aug. 25.

The vessel left Gibraltar Sunday night after being detained there since early July, when British forces seized it on suspicion of carrying oil to Syria in violation of European sanctions. The U.S., which has sanctions against Iran, is seeking to prevent anyone from doing business with the ship.

U.S. sanctions mean Iran cannot be “very transparent” about the destination of the tanker, Iranian Foreign Minister Javad Zarif said at a press conference in Helsinki. He said the U.S. is trying to “bully others from purchasing our oil” and that he hopes the release of the vessel will de-escalate tensions in the Persian Gulf.

A spokesman for the U.S. National Security Council didn’t immediately respond to a request for comment.

The incident is one of several in recent months that have strained relations between Iran and the West, following the U.S. reinstatement of sanctions on the Islamic Republic last year. Iran has maintained that the ship’s original detention on July 4 was unlawful. The Persian Gulf state continues to hold a U.K.-flagged tanker, the Stena Impero. Aggression in the region has threatened shipping in recent months in the Strait of Hormuz, the world’s most critical waterway for oil supplies.

“The U.S. surely can’t seize the Iranian tanker and, if it does, it would pose a threat to international maritime security,” Iran’s Foreign Ministry spokesman Abbas Mousavi said. Iran warned the U.S. via “diplomatic channels,” including Switzerland, against interfering with the tanker, in international waters, Mousavi said at a news conference in Tehran. Swiss diplomats serve as interlocutors between the U.S. and Iran.

Destination Unclear

It’s not known where the Iranian vessel is ultimately headed. Greek authorities haven’t received formal notification that the vessel intends to head to a port in the country, according to a spokesman for Greece’s coast guard. Kalamata’s port usually serves pleasure craft like sailboats and cruise ships, data compiled by Bloomberg show.

The waters off Kalamata could be a possible location for ship-to-ship cargo transfers, according to two vessel brokers without specific information about the tanker’s plans. A ship’s destination is entered manually into its Automatic Identification System and is picked up by vessel-tracking. The destinations can be altered multiple times on the same journey.

Gibraltar rejected an attempt by the U.S. to block the Iranian supertanker, saying that EU regulations don’t allow it to seek a court order to detain the vessel.

U.S. Complaint

A complaint unsealed in Washington stated that “Oil Tanker ‘Grace 1,’ all petroleum aboard it and $995,000 are subject to forfeiture,” according to a Justice Department statement. The statement alleges a “scheme to unlawfully access the U.S. financial system to support illicit shipments” of oil from Iran to Syria in violation of U.S. sanctions, money laundering and terrorism statutes.

Gibraltar last week released the vessel, after the government said Iran had provided assurances that the ship would not sail to a destination sanctioned by the EU. In response, the U.S. said it was gravely disappointed with Britain, and it warned that ports, banks and anyone else who does business with the vessel or its crew might be subject to sanctions, according to two administration officials.

Photo: IRNA

Iranian Tanker Departs Gibraltar After Failed U.S. Bid to Detain It

By Charles Penty and Verity Ratcliffe

The Government of Gibraltar says European Union regulations don’t allow it to seek a court order to seize a tanker which the U.S. accuses of breaching its sanctions by exporting Iranian oil.

The U.S. issued a warrant to seize the supertanker, which has been detained by the U.K. and Gibraltar since the beginning of July, on suspicion of hauling Iranian oil to Syria in violation of European sanctions, on Friday.

“The Central Authority’s inability to seek the Orders requested is a result of the operation of European Union law and the differences in the sanctions regimes applicable to Iran in the E.U. and the U.S.,” the Gibraltar government said in the statement. “The E.U. sanctions regime against Iran—which is applicable in Gibraltar—is much narrower than that applicable in the U.S.”

A complaint unsealed in Washington stated that “Oil Tanker ‘Grace 1,’ all petroleum aboard it and $995,000 are subject to forfeiture,” according to a Justice Department statement. The statement alleges a “scheme to unlawfully access the U.S. financial system to support illicit shipments” of oil from Iran to Syria in violation of U.S. sanctions, money laundering and terrorism statutes.

The tanker bore the name Grace 1 and a Panamanian flag when it was detained on July 4. It has since been re-flagged to Iran and its name changed to Adrian Darya 1.

Iran’s navy is ready to escort the supertanker if necessary, the semi-official Mehr news agency reported, citing a naval commander. “We have no intention of sending a flotilla to Gibraltar, but we are ready to do so to escort the Grace 1 back to Iran’s territorial waters,” the head of the army’s naval division, Admiral Hossein Khanzadi, said on Sunday at a global maritime event in Tehran.

The vessel, which is currently anchored off the coast of Gibraltar, is at the center of a diplomatic spat between the U.K. and the Trump administration. The U.S. has threatened to impose sanctions on anyone dealing with the ship and expressed disappointment with Britain after a court in Gibraltar ruled the ship was free to sail on Thursday.

Ports, banks and anyone else who does business with the ship or its crew might be subject to penalties, two U.S. administration officials said. Iran’s foreign minister said on Twitter that the ship’s detention was unlawful.

While the cargo was originally bound for Syria, Iran has provided assurance that this is no longer the case, according to the Gibraltar government. “The evidence is clear and the facts speak louder than the self-serving political statements we are hearing today,” according to the statement issued on Friday, which didn’t specify the comments it was referring to.

Missed Opportunity

The court’s decision Thursday to release the Grace 1 was a missed opportunity and the Trump administration hopes that the U.K. government and authorities in Gibraltar will reconsider, according to the U.S. officials, who asked not to be identified discussing private deliberations. They said the court order rewards Iranian terrorism and Tehran will interpret the action as appeasement.

The American officials said the U.K. should think of the tanker issue in terms of the broader relationship with the U.S., particularly as U.K. Prime Minister Boris Johnson’s government presses forward with departing the European Union and seeks a free-trade agreement with the U.S. While the people wouldn’t say the release threatens prospects for that deal, they added that the U.K. should ask if it wants to do business with the U.S. or Iran.

Diplomatic Row

The seizure of the tanker has heightened tension between Iran and the West, in a relation already under strain since the U.S. reimposed sanctions last year. A series of vessel attacks and seizures have threatened shipping in the Strait of Hormuz, the world’s most critical chokepoint for oil shipments.

Following the Grace 1’s detention, Iran seized a British-flagged vessel, the Stena Impero, which it continues to hold. The decision to release the tanker is unrelated to developments with the ship now known as Adrian Darya 1 and state officials must determine its fate, Alireza Tangsiri, head of the Islamic Revolutionary Guard Corps’ naval division, said on Sunday, according to Mehr.

The U.K. Foreign and Commonwealth Office cautioned that there was no connection between Gibraltar’s enforcement of sanctions and Iran’s activities at the mouth of the Persian Gulf.

“There is no comparison or linkage between Iran’s unacceptable and illegal seizure of, and attacks on, commercial shipping vessels in the Strait of Hormuz and the enforcement of EU Syria sanctions by the Government of Gibraltar,” it said in an emailed statement Thursday. “Freedom of navigation for commercial shipping must be respected and international law upheld.”

Heading for Greece

Adrian Darya changed its intended destination on Monday to the Greek port of Kalamata, from its previous indication of the Mediterranean Sea, according to vessel-tracking data compiled by Bloomberg.

It remains to be seen what will happen to the vessel now. The U.S. said it was gravely disappointed with Britain after Gibraltar’s release of the tanker, and it warned that ports, banks and anyone else who does business with the vessel or its crew might be subject to sanctions, according to two administration officials.

The waters off Kalamata could be a possible location for ship-to-ship cargo transfers, according to two vessel brokers without specific information about the tanker’s plans. Tanker crews enter destinations into ship logs that get picked up by vessel-tracking satellites. The destinations can be altered multiple times on the same journey.

The vessel’s status was “under way using engine” with speed of 6.7 knots as of 11:59 a.m. on Monday in Singapore, according to ship-tracking data. It has an estimated time of arrival at Kalamata of Aug. 25.

Photo: Bloomberg

Iran Denies Giving Gibraltar Assurances for Release of Tanker

By Amir Havasi

Iranian officials on Friday denied that any assurances were given to Gibraltar to release an Iranian tanker now sailing on into the Mediterranean, calling it a "victory" for Tehran.

The ship's seizure, with the help of British Royal Marines, had triggered a sharp deterioration in relations between Tehran and London and what Britain saw as the tit-for-tat detention by Iran of the British-flagged tanker Stena Impero.

Gibraltar's Supreme Court ordered the tanker released on Thursday after the British overseas territory said it had received written assurances from Iran that the Grace 1 would not head to any country subject to European Union sanctions.

The ship had been detained on suspicion that its cargo was destined for the Banias oil refinery in Syria in breach of an EU embargo.

But Iran denied it had provided any assurances to secure the ship's release, saying Gibraltar was only seeking to "save face.”

"Iran has given no assurances over the Grace 1 not going to Syria to secure its release," the state broadcaster's youth website quoted foreign ministry spokesman Abbas Mousavi as saying Friday.

"The tanker's destination was not Syria ... and even if it was, it did not concern anyone else."

Government spokesman Ali Rabiei hailed a victory for Iran that he said had been achieved without making any concessions.

"Our illegally seized oil tanker is set free. This victory without giving any collateral is the result of #powerful_diplomacy and strong will to fight for a nation's rights," Rabiei said in a tweet.

Tanker to Fly Iran Flag

The Grace 1 will be renamed and switch to the Iranian flag for its onward journey into the Mediterranean, senior Iranian shipping official Jalil Eslami said.

"At the owner's request, the Grace 1 will depart for the Mediterranean after being reflagged under the Islamic Republic of Iran's flag and renamed as Adrian Darya for the voyage," Eslami told state television.

The ship was originally Panama-flagged and is carrying two million barrels of Iranian oil, he added.

Hours before the court's ruling, the administration of US President Donald Trump, which has waged a campaign of "maximum pressure" against Iran, launched a last-minute legal move demanding that the Gibraltar authorities extend the vessel's detention.

Iranian Foreign Minister Mohammad Javad Zarif tweeted that the US attempt at "piracy" had failed, saying it showed the Trump administration's "contempt for the law".

Tehran and Washington have been at loggerheads since Trump withdrew from a landmark 2015 nuclear deal between major powers and Iran last year and reimposed crippling unilateral sanctions.

Following the Grace 1's release, Britain renewed its demand that Iran release the British-flagged tanker it seized in the Strait of Hormuz on July 19.

Tehran charged that the Stena Impero was in violation of "international maritime rules" but the move was widely seen as retaliation for the detention of the Grace 1.

The July 4 seizure of the tanker Grace 1 in the British overseas territory of Gibraltar with a cargo of Iranian oil had triggered a sharp deterioration in relations between Tehran and London and the detention by Iran of a British-flagged ship.

Photo: IRNA

Gibraltar Court Agrees to Release Detained Oil Tanker

By Jonathan Browning and Alex Longley

The U.S. is gravely disappointed with the U.K. after a Gibraltar court allowed the release of an Iranian tanker suspected of hauling oil to Syria, and threatened sanctions against ports, banks and anyone else who does business with the ship or its crew, two administration officials said.

The court’s decision Thursday to release the Grace 1 was a missed opportunity and the Trump administration hopes that the U.K. government and authorities in Gibraltar will reconsider, according to the officials, who asked not to be identified discussing private deliberations. They said the court order rewards Iranian terrorism and Tehran will interpret the action as appeasement.

The Grace 1 had been held in Gibraltar after British forces seized it last month on suspicion that it was hauling Iranian crude oil to Syria. The U.S. Department of Justice is seeking to block the vessel’s release, but the Gibraltar Supreme Court on Thursday said American authorities hadn’t filed the appropriate legal application.

The two administration officials said the Grace 1 should now be considered a pariah. Anyone that does business with the ship, its crew or its owners, or provides financial transactions or port services to the vessel could be liable for evading U.S. sanctions, the officials said.

They argued that the U.K. should think of the tanker issue in terms of the broader relationship with the U.S., particularly as Prime Minister Boris Johnson’s government presses forward with departing the European Union and seeks a free-trade agreement with the U.S. While the people wouldn’t say the release threatens prospects for that deal, they added that the U.K. should ask if it wants to do business with the U.S. or Iran.

Iran said the ship wouldn’t sail to a sanctioned destination and is now rushing to return it to international waters before the U.S. finds a way to prolong its six-week detention.

“In light of the assurances we have received, there are no longer any reasonable grounds for the continued legal detention of the Grace 1 in order to ensure compliance” with European sanctions, the Gibraltar government said in an emailed statement.

The decision now essentially sets up a race between Iran and the U.S. over the ship’s fate. The vessel is bound for a port in the Mediterranean, Iran’s Mehr news agency said, citing Jalil Eslami, deputy for maritime affairs of the Iranian ports and maritime organization. Tanker-tracking data compiled by Bloomberg show that the vessel hadn’t moved as of 5:30 p.m. New York time.

Diplomatic Row

The seizure of the tanker set off a diplomatic row, underscoring tense relations between Iran and the West that have only worsened since the U.S. reimposed sanctions on the Persian Gulf state last year. Tensions have been high in the region in recent months amid a series of vessel attacks and seizures, which have threatened shipping in the Strait of Hormuz, the world’s most critical chokepoint for oil shipments.

Following the detention of the ship on July 4, Iran seized a British-flagged vessel, the Stena Impero, which it continues to hold.

Gibraltar’s decision to release the Grace 1 “is a satisfactory result for the U.K.,” Cara Hatton, an analyst at Falanx Assynt Ltd., a geopolitical risk consulting firm, said in an emailed statement. It “fully justifies Britain’s initial seizure of the ship, and increases the likelihood that Iran will now release the Stena Impero without giving the impression that the countries are engaged in a tanker swap.”

The U.K. Foreign and Commonwealth Office cautioned that there was no connection between Gibraltar’s enforcement of sanctions and Iran’s activities at the mouth of the Persian Gulf.

“There is no comparison or linkage between Iran’s unacceptable and illegal seizure of, and attacks on, commercial shipping vessels in the Strait of Hormuz and the enforcement of EU Syria sanctions by the Government of Gibraltar,” it said in an emailed statement. “Freedom of navigation for commercial shipping must be respected and international law upheld.”

The two U.S. officials rejected that idea, saying that the U.K. was trying to deescalate the situation with Iran and remove any distractions it faces to focus on Brexit.

The Gibraltar government said in its statement that it held several meetings with Iranian representatives this month and last to negotiate the tanker’s fate, and on Tuesday, the Islamic Republic agreed that the ship’s final destination wouldn’t be subject to European Union sanctions.

Iran agreed to re-flag and insure the vessel, which was carrying about $140 million in crude oil to the Baniyas refinery in Syria. It will now travel under the Iranian flag.

Four crew members from the Grace 1—the captain, chief officer and two second mates—have been released, according to the Gibraltar government. The vessel’s captain has no intention of going back aboard the ship, said his lawyer, John Wilkinson. “He wants to go home to India,” he said. Most of the 28 crew are on board, he said.

Photo: Fleet Mon

U.S. Seeks Further Detention of Seized Tanker, Gibraltar Says

The United States applied on Thursday for Gibraltar to keep in detention an Iranian oil tanker at the center of a stand-off between Tehran and London, the public prosecutor said.

The announcement by attorney Joseph Triay delayed a court decision on whether to extend the detention of Grace 1, which is suspected of smuggling oil to Syria and has been held since July 4.

Triay did not detail in court the basis for the US request other than as "mutual legal assistance".

Chief Justice Anthony Dudley made clear that were it not for the US move, "the ship would have sailed" from the overseas British territory.

The Gibraltar Supreme Court decision on the fate of the ship has been adjourned until after four pm (14:00 GMT).

The captain and three officers from Grace 1, had their bail lifted and were formally released, a Gibraltar government spokesman said.

The supertanker, carrying 2.1 million barrels of Iranian oil, was seized by Gibraltar police and British special forces, provoking a diplomatic crisis. It was suspected of carrying oil to war-torn Syria in violation of EU sanctions.

Photo: Wikicommons

Gibraltar, Iran Officials Hold Talks on Seized Oil Tanker

Gibraltar's Chief Minister Fabian Picardo said Thursday he had a "constructive and positive" meeting with Iranian officials in London aimed at defusing tensions around an oil tanker carrying Iranian oil being held in the British territory's waters.

In a statement, Picardo's government said the meeting took place on Wednesday and to discuss the continued detention of the Grace One tanker "and to seek to de-escalate all aspects of the issues arising.”

It did not identify which Iranian officials participated.

The Grace One supertanker, carrying 2.1 million barrels of oil, was intercepted by British Royal Marines and Gibraltar's police as it transited through waters claimed by Gibraltar, which is located on Spain's southern tip.

US officials believed the tanker was destined for Syria to deliver oil, in violation of separate sets of EU and US sanctions.

Iran has reacted with fury at what it termed "piracy" and warned it would not let the interception go unanswered.

Last week, a British warship in the Gulf warned off armed Iranian boats that tried to stop a UK supertanker. London has since announced the deployment of two more warships to the Gulf region for the coming months.

Increased Concern in the Gulf

British Foreign Secretary Jeremy Hunt last weekend said he held talks with his Iranian counterpart Mohammad Javad Zarif about the Grace One that he also termed "constructive". He tweeted that he promised he would "facilitate" the release of the tanker "if we received guarantees that it would not be going to Syria".

An order by Gibraltar's supreme court authorising the detention of the Grace One tanker lapses after Friday, though it can be renewed for up to three months.

Iran on Thursday announced it had seized a foreign tanker in international waters in the Strait of Hormuz at the entrance to the Gulf, claiming it was involved in "fuel smuggling". Video it released showed the vessel to be the MT Riah, a Panama-flagged ship whose ownership has not been established.

The US military, which maintains a naval base in the Gulf and regularly patrols the area, said it will work "aggressively" with allies to ensure safe civilian shipping in the region.

Bahrain said Thursday it will host a conference on "maritime and air navigation security" and "find ways to deter the Iranian threat and ensure freedom of navigation in this strategic region", the Gulf kingdom's BNA state news agency said.

The Strait of Hormuz is the conduit for nearly a third of the world's crude oil.

Bahrain, which hosts the US Fifth Fleet, said it would co-host the conference with the US and Poland. It did not specify a date for the meeting.

Photo: Wikicommons

UK Says Iran Tanker Will be Freed After Guarantees on Destination

British Foreign Secretary Jeremy Hunt sought to ease tensions with Iran on Saturday, saying a tanker held by Gibraltar would be released if Tehran guaranteed it was not heading to Syria.

He said he had a "constructive call" with his Iranian counterpart Mohammad Javad Zarif, who he said assured him that Tehran "is not seeking to escalate" tensions between the countries.

"I reassured him our concern was destination not origin of the oil on Grace One," a tanker seized off the coast of the tiny British territory of Gibraltar on July 4, Hunt tweeted.

An Iranian statement confirmed the conversation and said Hunt underlined Iran's "right to export oil". It added that Tehran hoped that an investigation in Gibraltar into the seized ship "would lead quickly to the release of the Iranian tanker".

US officials believe the tanker was destined for Syria to deliver oil, in violation of separate EU and US sanctions .

Hunt said Britain "would facilitate release if we received guarantees that it would not be going to Syria, following due process in Gib (Gibraltar) courts.

"Was told by FM Zarif that Iran wants to resolve issue and is not seeking to escalate."

Tehran had reacted angrily to the seizure, and Britain this week said Iranian military vessels had tried to "impede the passage" of a British oil tanker in the Strait of Hormuz.

Detained British-Iranian Discussed

Iran, in its statement relayed by state media, said Zarif had told Hunt that his country would continue to export its oil "in all circumstances" and that the Grace One's destination was a "legal" one, in "the eastern
Mediterranean". He did not specify where. Iran has repeatedly said it deems US and EU sanctions against it as “illegal.”

Hunt said Gibraltar's Chief Minister Fabian Picardo was doing an "excellent job co-ordinating issue and shares UK perspective on the way forward.”

Hunt also said he raised with Zarif the imprisonment of British-Iranian national Nazanin Zaghari-Ratcliffe, and Zarif "said he would continue to seek to find a solution.”

Picardo said in a separate statement that he spoke with Hunt before and after the foreign secretary's conversation with Zarif and backed several of the points that were raised.

He said notably that he asked Hunt to tell Iran that Gibraltar would continue to enforce EU sanctions but it was also prepared to release the Grace One "if we were satisfied that we had received guarantees that it would not be going to Syria or to any entity sanctioned under the relevant EU regulations.”

He added that he was "pleased to hear of Iran's constructive approach and their wish also to resolve this situation, which comes at a time of heightened international tensions".

Photo: Wikicommons

British Forces Seize Oil Supertanker for Busting Syria Sanctions

By Verity Ratcliffe, Julian Lee, and Javier Blas

British special forces seized a supertanker off Gibraltar suspected of carrying Iranian oil to Syria in violation of European and U.S. sanctions against the war-torn country.

Grace 1, which can hold 2 million barrels of crude, is now anchored near Gibraltar, a British overseas territory in southern Spain that controls the strait between the Mediterranean Sea and the Atlantic Ocean. The vessel is registered in Panama.

The seizure, announced by Gibraltar’s government, could inflame tensions between Iran and the European Union just as the U.K., France and Germany try to keep the Islamic Republic from walking away from the nuclear deal. The U.S. quit the pact a year ago, prompting Iran to significantly increase uranium enrichment in response.

While Syrians will feel the immediate impact of halting the crucial oil shipment to the country, the arrested vessel shows the difficulty Iran faces in finding outlets for its crude as President Donald Trump’s administration ramps up sanctions.

“We have detained the vessel and its cargo,” said Fabian Picardo, Gibraltar’s chief minister. “This action arose from information giving the Gibraltar government reasonable grounds to believe that the vessel, Grace 1, was acting in breach of European Union sanctions against Syria.”

Suez Ban

Gibraltar didn’t say where the crude came from, but shipping tracking data compiled by Bloomberg suggest the vessel loaded at Iran’s Kharg Island oil terminal in mid-April. After anchoring off the United Arab Emirates for several weeks, the ship began a journey around the southern tip of Africa, passing Cape Town in early June, rather than taking the more direct route through the Suez Canal.

That route from Iran to Syria is about 23,300 kilometers (14,500 miles), compared with just 6,600 kilometers via the Red Sea and Suez Canal. A ship the size of the Grace 1, known as a Very Large Crude Carrier, or VLCC, can’t pass through the canal fully loaded. The shorter route would require it to discharge half its cargo, load it on to a smaller ship or send the oil through the Sumed Pipeline, and pick it up again in the Mediterranean.

Iran can’t pump oil through the pipeline, which spans Egypt from the Red Sea to the Mediterranean, because the link is owned by companies from Egypt, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar. The pipeline’s owners have not permitted the transit of Iranian crude since August 2012.

Iran has regularly supplied Syria with crude since the country descended into civil war in 2011. Iran backs the government headed by President Bashar Al-Assad, which has been sanctioned for most of this decade due to its bloody crackdown on the country’s civilians.

Syria receives Iranian crude despite the embargo. It imported at least 32,000 barrels a day in 2018 and 66,000 in 2017, according to tanker tracking data compiled by Bloomberg. It has imported similar volumes so far this year.

Gibraltar said Grace 1 was destined for the Baniyas refinery, which is owned by the Syrian government and is subject to both U.S. and E.U. sanctions. Three of the facility’s underwater oil pipelines were allegedly sabotaged with mines in June, according to Syrian TV, potentially complicating the unloading of cargoes there.

Photo: Wikicommons