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Wednesday, April 17, 2024

After UN rejection, US seizes 1 million barrels of Iranian oil

The US confirmed Friday that it seized over one million barrels of Iranian oil from four tankers bound for Venezuela. The oil is now in US custody.

The US confirmed Friday that it seized over one million barrels of Iranian oil from four tankers bound for Venezuela.

The Justice Department said the seizure of Iranian fuel was the largest ever recorded, charging that it was sent by Iran’s Islamic Revolutionary Guard Corps, a US-designated terrorist group. The oil is now in US custody.

The tankers are greek owned

The transfer of fuel from four Greek-owned ships, occurring over the past several weeks, risked igniting a tit-for-tat response from Iran. This week, an Iranian military unit briefly boarded a tanker in the Gulf of Oman in what several American officials described as a show of force — and, potentially, Tehran’s efforts to reclaim any of its fuel that might be on the ship.

American officials said the four tankers — the Bella, the Bering, the Pandi and the Luna — were boarded without force after diplomatic and legal pressure was brought to bear against a Greek shipping magnate, George Gialozoglou.

American officials would not describe how the high-seas intercepts occurred other than to say U.S. military ships were not involved. A warrant dated July 1 that approved the operation said the fuel could be secured by American government personnel, contractors or others appointed by the court.

Read more: US sanctioned “Mystery Oil Tanker” hijacked into Iran?

The department did not say where the four fuel cargo vessels — the Luna, Pandi, Bering and Bella — were interdicted, nor did it note their current status, only saying that U.S. District Court Judge Jeb Boasberg issued an order to seize their cargo.

Move meant to prevent revenue reaching Iran

In July, federal prosecutors filed a lawsuit to seize the gasoline aboard the four tankers that Iran was trying to ship to Venezuela, aiming to prevent the revenues from reaching Iran’s coffers.

Iran’s economy, traditionally dependent on oil exports, has suffered in recent years with the US reinstating crippling economic sanctions it agreed to lift as part of a 2015 nuclear agreement with world powers.

Roughly 1.116 million barrels of fuel were confiscated from the foreign-flagged vessels M/T Bella, M/T Bering, M/T Pandi and M/T Luna, a Justice Department statement said, adding that the seizure took place “with the assistance of foreign partners.”

The cargo was intercepted on Wednesday, under a warrant issued by a U.S. District Court over a July 2 complaint seeking the forfeiture of all petroleum products aboard the vessels. The property is now in U.S. custody, the Justice Department said.

No military force was used

According to The Associated Press, quoting unnamed U.S. officials, no military force was used in the seizure of the cargo, and none of the ships was physically impounded. Instead, U.S. officials threatened ship owners, insurers and captains with sanctions to force them to hand over their cargo, the AP reported.

“These actions represent the government’s largest-ever seizure of fuel shipments from Iran,” according to the DOJ statement, which said the Islamic Revolutionary Guard Corps, designated a foreign terrorist organization, was behind the shipment.

The prospect of retaliatory action by Iran has the potential to disrupt oil markets if Iran interferes with international oil tankers transiting the Strait of Hormuz, the world’s most critical choke point for oil shipments. However, the impact to oil prices may be limited from what it once might have been given lower fuel consumption in the face of pandemic-driven lockdowns.

“The seizure did not escalate militarily because there were no Iranian naval vessels escorting the tankers that had orders to engage,” said Scott Modell, managing director of Rapidan Energy Group. “But this is getting closer to the line. Tehran will show caution, for now, knowing that Iran’s collaboration with Venezuela was unlikely to ever go beyond a few small-scale transactions and public displays of anti-Trump solidarity.”

The tensions between Iran and the US escalated after Trump announced the unilateral US exit from the pact in May 2018, and began to reinstate sanctions that had been eased by his predecessor, Barack Obama.

Read  more: Oil prices correct as fears of a US-Iran clash reduce

Iran’s oil industry has been hit hard by the sanctions, with many countries cutting down oil imports from Iran, fearing economic penalties from the US.

Anadolu with additional input by GVS News Desk