US Treasury Sanctions 13 Ships Smuggling Hundreds of Millions of Dollars in Iranian Oil

(JNS) The U.S. Treasury Department sanctioned a United Arab Emirates-based shipping company and 13 of its vessels on Thursday for their role in transporting hundreds of millions of dollars worth of goods for the Iranian military.

The Comoros, East Africa-flagged vessel Hecate, which is managed by Oceanlink Maritime DMCC, conducted a ship-to-ship transfer in March with a vessel owned by an Iranian military-controlled front company. The latter vessel was carrying “over $100 million worth of commodities,” according to the Treasury.

“Oceanlink Maritime DMCC operates a fleet of over one dozen vessels which are deeply involved in the shipment of Iranian commodities, including on behalf of Iran’s military,” the department stated.

Treasury designated the company and its fleet for providing support to the Iranian entities, which ultimately fund the Islamic Revolutionary Guard Corps-Quds Force, a U.S.-listed foreign terrorist organization.

The statement did not say what commodity the ships transferred, but the open-source Marine Traffic shipping tracker lists the Hecate as an oil tanker.

Jason Brodsky, policy director of United Against Nuclear Iran, which tracks the “ghost fleet” of tankers that Iran uses to evade U.S. sanctions, said that the newly-designated ships are just one component of Iran’s larger smuggling operation.

“It’s a very sophisticated game. They use ship-to-ship transfers, spoofing locations and they try to mask the origin of the product that they’re trying to evade U.S. sanctions on,” Brodsky told JNS. “We have around 377 vessels on our list right now, and that includes the ones that were sanctioned today.”

“There are still a lot of ships to crack down on,” he said. “This is only a small portion of what’s been going on with these illicit trades.”

One difficulty that the United States faces in enforcing sanctions against the Islamic Republic is that Iran sells much of its oil to China, which openly opposes U.S. sanctions on Iran. (The Hecate is currently bound for a port near Qingdao, in northeastern China.)

China routinely imports more than 1 million barrels of Iranian crude daily in violation of U.S. law. Since U.S. President Joe Biden took office in 2021, United Against Nuclear Iran estimates that China has bought $90 billion of Iranian oil.

“We are focused on disrupting Iran’s ability to finance its terrorist proxy and partner groups and support to Russia’s war of aggression against Ukraine,” stated Brian Nelson, a Treasury under secretary. “The United States will continue to use our full range of tools to target the illicit funding streams that enable Iran’s destabilizing activities in the region and around the world.”

Brodsky told JNS that the Biden administration’s enforcement of sanctions on Iran has been uneven and is constrained by its China policy.

“Sanctioning the Chinese entities would impact other U.S. interests and equities in the U.S.-Chinese bilateral relationship and great power competition,” he said. “Unfortunately, in some cases, the Iran policy has become a hostage to more important agenda items in the U.S.-China relationship.”

‘We have two primary concerns’

On Wednesday, Sens. Chuck Grassley (R-Iowa), Tim Scott (R-S.C.) and 11 Senate colleagues penned a letter to U.S. Treasury Secretary Janet Yellen and U.S. Secretary of State Antony Blinken expressing “concern regarding the Biden administration’s ongoing strategy of appeasement in response to Iranian aggression.”

They also expressed concern about the Biden administration issuing a sanctions waiver to Iran on March 12.

“We have two primary concerns with the decision to renew the waiver. First, the waiver makes restricted Iranian funds more accessible to the ayatollah’s regime, at a time when Iranian-backed aggression in the region is at a peak,” the 13 senators wrote. “Second, the administration appears to be disregarding congressional intent that any payments made to Iran remain severely restricted.”

The senators cited the “violent campaign” Iranian proxies have waged in the Red Sea and across the Middle East following Hamas’s “brutal attack” against Israel on Oct. 7.

“This campaign not only threatens to disrupt critical supply chains and drive up the cost of goods, but it also relentlessly targets U.S. service members—to deadly effect,” they wrote. “It is unfathomable that this is the context in which the administration determined that it was within the national security interest of the United States to waive sanctions on restricted Iranian funds, making them more accessible to the regime.”

“The United States should be restricting Iran’s access to currency abroad,” they added. “Instead, your administration is expanding it, all while continuing to share limited information on a strategy to restore deterrence in the Middle East with Congress or the American people.”