Iranian oil exports face new U.S. sanctions on shadow fleet operations

The U.S. Department of the Treasury announced a new set of sanctions this week targeting Iran’s “shadow fleet” vessels used to transport sanctioned oil. 

The department’s Office of Foreign Assets Control announced new sanctions on 29 shadow vessels on Thursday, asserting that the ships have transported “hundreds of millions of dollars’ worth of Iranian petroleum products.”

“As President Trump has said repeatedly, the United States will not allow Iran to have a nuclear weapon,” Treasury Under Secretary for Terrorism and Financial Intelligence John K. Hurley said. “Treasury will continue to deprive the regime of the petroleum revenue it uses to fund its military and weapons programs.” 

A shadow fleet is a collection of ships that deploy altered flags, fake identities or disabled transponders to covertly transport sanctioned goods, such as Iranian oil, to buyers around the world. The fleets have increasingly become the target of Western governments seeking to limit the oil revenue of Iran and Russia.

Seven of the 29 sanctioned vessels are operated by Hatem Elsaid Farid Ibrahim Sakr, the Treasury Department said, an Egyptian businessman who has used his connections in Iran to transport Iranian oil through the Persian Gulf. 

Several companies active in the UAE, India, the Marshall Islands and Panama were also hit with sanctions for doing business with shadow vessels carrying Iranian oil, OFAC said. 

Thursday’s sanctions are the latest in a series of new restrictions on Iran’s shadow fleet imposed by the Trump administration. In October, OFAC announced sanctions on 40 individuals, companies and vessels engaged in the transfer of Iranian oil. 

Despite enormous economic sanctions from the U.S. and the reimposition of United Nations Security Council-backed sanctions earlier this year, Iran’s oil exports have not slipped. Iran was exporting over 2.2 million barrels of oil per day in October, according to available data. 

China is Iran’s primary buyer, accounting for over 90% of exports. The United Aram Emirates and Singapore are also prominent customers.