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The Iranian Oil Ghost Fleet [1]
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Date: 2025-01-17
The Russians are in the news about their "Shadow Fleet" of oil tankers because they've been using them to cut electric and internet cables, and spying, besides carrying oil. The fleet exploded in size beginning in 2022, when Russia invaded Ukraine, and sanctions went after every Russian source of revenue.
The Iranians have been doing it much longer with their "Ghost Fleet."
They began hiding their ships, again, in November of 2018 as the US was preparing to impose new sanctions.
With the United States preparing to reimpose sanctions on Iran's oil and financial sectors on November 5th (2018), officials from Tehran to Brussels and Washington will be seeking information about whether the sanctions are working as intended to thwart Iran's sale and transport of oil around the world. AFP reported on November 2nd (2018) that in late October, every single tanker carrying Iranian oil suddenly "went dark," turning off their transponders to avoid being tracked, the first time that had been seen by TankerTrackers monitoring group in Stockholm. Oil and shipping analysts say that Iran used the same technique to hide it's oil sales the last time it was subject to global sanctions between 2010 and 2015, switching off tracking systems in particular to hide the destinations of its oil shipments.
Iran has had a lot of practice. The first sanctions against Iran happened in 1995. The United States banned all involvement with petroleum investment in Iran.
In August 1996 the United States Congress passed the Iran Libya Sanctions Act that imposed tough penalties on companies found to be investing more than $20 million a year in Iran's oil and gas industry. But these sanctions had limited short-term effects on Iran's economy.
In 2010, during the Obama administration, the US Congress passed the comprehensive Iran Sanctions, Accountability, and Divestment Act, which targeted firms investing in Iran's energy sector or selling refined petroleum to Tehran.
Sanctions were lifted when the United States and Iran signed the nuclear agreement during the Obama administration.
Iran had to restart their undercover oil shipping business when Donald Trump pulled the United States out of the agreement with Iran that was designed to keep them from building nuclear weapons. It was called The Joint Comprehensive Plan of Action. Trump pulled us out in May of 2018, and new sanctions went into effect in November of 2018.
Iran, like Russia, has flagged their ships with countries of convenience like Panama, Bolivia, Liberia, Togo, and Tanzania.
To disguise ship identities, Iran re-flags some of its tankers out on the open waters to add an extra layer of protection to the smuggling operations. Reflagging tankers allowed to Tehran plausible deniability for smuggling oil and breaking sanctions under the cover of foreign flags. Iran also changed the names of its tankers to confuse global ship monitoring systems.
The problem for Iran is that each ship is assigned a unique IMO code. International Maritime Organization number. So, even though Iran would change the name of the ships, they still could be tracked by their IMO.
There is also satellite imagery that can be used to track ships when they've turned off their transponders.
On December 3, 2024, the United States sanctioned 35 firms and vessels for transporting Iranian oil in violation of sanctions. The designated companies were based in the United Arab Emirates, Panama, India, China, and Hong Kong. Smaller scale refiners in China, known as teapots, reportedly buy some 90% of Iran's exported oil.
Once again, the new sanctions are all about Iran funneling the oil revenue towards its missile and nuclear programs and supporting Hamas and Hezbollah and other proxy terrorist organizations.
I picked an owner on the new Dec. 3rd sanctions list that wasn't Chinese. Vision Ship Management LLP. Their home page laughably shows a background video of a cruise ship.
The "Contact us" brings up a fillable form. There is an
[email protected] as their email. The company address reads like one room in a building in Mumbai, India. Office No. 401, Space 912. Is the space where they park? No phone number and the Indian web designer gets credit.
It's a bit classier that the Russian shadow fleet company websites, but it's still a sham. The clickable icons for Facebook, Twitter, Instagram and what looks like YouTube, don't work at all, and the page was created in 2023, but hasn't caught up with the fact that It's X, not Twitter, now.
Of their three ships, two show Panama flags, the third shows no flag at all. Vision Ship Management LLP is also the commercial and ISM manager (International Safety Management).
I'll try one more, Lufindo Holding Limited, based in the Seychelles, a country of 115 islands in the Indian Ocean off the coast of East Africa. Opensanctions.org has them showing their one ship, the Elva, sanctioned. MagicPort shows their address as C/O Ravel Ship Management Pvt. Ltd. Plot 75A, street with no street address number, in Chennai, India. That's not the Seychelles, obviously.
I found Madras Creatives LLP at Plot 75, not 75A, and they take up the ground and first floor. Google Earth doesn't show a 75A.
This X account says Lufindo has been delivering oil to the Houthis in Yemen, which they then sell to support themselves and other Iranian proxies.
Ravel Ship Management had 4 ships stripped of flags in 2020 by the Trump administration. Their supposed website, ravelshipmanagement.com, is parked on GoDaddy.com, and I'm going to assume the info email and the phone number don't work either.
MarineTraffic says the ship Elva is now flying the flag of Sao Tome Principe. Another African island nation. It's at anchor near Singapore. It's been there for weeks. This is the fourth name change on the Elva since 2002. A Google link said the owner/operator is Inaya Ship Management Pvt. Ltd. Opensanctions.org shows that company is also sanctioned, located in Karachi, Pakistan. No phone number, no website, no email. Just an address. I think I've gone far enough. The Elva is another ship that has shell companies supposedly controlling it. The three companies and the ship were all put on the US sanctions list on Dec. 3, 2024.
It's the exact same pattern I found following the Eagle S ship and its supposed owner, Caravella LLC FZ. Rabbit holes. No valid contacts, cell phone numbers when there is one, garbage websites when there is one, and office locations that don't exist.
The U.S. Treasury Dept. controls sanctions through their financial intelligence and enforcement agency OFAC. Office of Foreign Assets Control.
You can look up to see if a ship, airplane, individual or entity is on the list here. There's a second list search format here. You can also download the complete sanctions lists here, but they are large XML and smaller CSV files.
The sanctions put into effect on Iranian ships, businesses and individuals are extensive. OFAC warns that any individual or company doing any business with them is also subject to sanctions. It doesn't matter to OFAC where in the world you are, you're on notice. Ignorance is not an excuse.
How much will these new Dec. 3rd sanctions affect Iran's oil business? Unknown with almost of their oil sales going to China.
The OFAC concludes their sanctions list paper with:
The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior.
When talking about the Iranians, positive change is not in their vocabulary.
This is the press release from the OFAC on the Dec. 3rd sanctions.
Even when you've got them dead to rights, an Iranian tanker has another method of concealment.
Iran used ship-to-ship transfers to conceal oil sales. In the shipping industry, transfers are commonly used to break up large shipments into smaller cargos. Iran used the practice to transfer crude oil from its tankers, either stationed near a port or out at sea, to a non-Iranian vessel, "to mask the fact that the true origin of the oil is from Iran, and to introduce it into the global market as if it were non-Iranian oil," according to the US Treasury. The cargo, disguised as non-Iranian, was then sold to buyers. In April 2019, Iran shipped as much as 300,000 BPD (barrels per day) of oil using ship to ship transfers. Large VLCC (very large crude carrier) tankers, linked to China's National Petroleum Company, reportedly conducted ship-to-ship transfers of Iranian oil off the coast of Malacca. The oil was then covertly delivered to China. In 2019, Iran had insufficient on-shore space to store excess oil while searching for buyers, so it stored the oil in large tankers that either sailed in circles around the Persian Gulf, or docked in Iran's territorial waters.
Another method of investigation is taking samples of oil from tankers and analyzing it, as there are differences in crude oil that can pinpoint the country of origin. On the high seas in international waters, this can't be done. Only if the ship went to a port, where ship inspections are done, would this be possible. Or, a buyer could ask to have a sample taken so he knows the oil is not Iranian. If the ship goes straight from Iran to China, you're out of luck, but the ship can still be traced and sanctioned anyway through Automatic Identification System transponder and satellite imagery. A Chinese tanker recently tried to cover its tracks by using two transponders, one being for a non-existent ship, and switching back and forth between them.
United Against a Nuclear Iran (UANI):
Since the October 7th attack by Iranian-backed Hamas, the Biden Administration has noticeably ranked up efforts on "Ghost Fleet" tankers. As of October 28th, 2024, a total of 98 tankers were sanctioned during the 12 preceeding months. ... sanctioned tankers continue to operate in sanctioned oil trade, approximately 70% remain active.
Still, UANI's statistics show a downward trend. Sanctions are causing Chinese oil terminals to be wary of Iranian tankers.
85% reduction in volume per tanker. 40%-50% drop in ship-to-ship transfers. 70% of vessels are reported as "empty" after designation, indicating limited access to discharge ports.
Sanctions have also discouraged insurers, brokers, and other legitimate operators from engaging with these vessels, further complicating the dark fleet's ability to complete deliveries.
Because oil terminals are increasingly reluctant to allow Iranian ships to unload. There has been more reliance on ship-to-ship transfers to vessels of other nations, to disguise the origin, increasing the cost to Iran of exporting.
Maritime Executive reported on Jan. 7, that Chinese state-owned Shandong Port Group will block tankers sanctioned by the United States from using its port facilities.
According to the memos, shared by Reuters, Shandong Port Group "forbids ports to dock, unload or provide ship services to vessels on the Office of Foreign Assets Control list managed by the US Department of State."
UANI reports that Iran exported 587 million barrels of oil in 2024, and 533 million went to China. Shandong has port operations in 4 cities, and its eight tankers are already under sanctions. So what does Shandong do with its own sanctioned tankers if they can't use their ports? The tankers are state owned. If they allow their own tankers to unload, the ports under their control could also be sanctioned. This would be a big blow to Iran if the Chinese now become even more wary of taking oil from Iran.
Reuters says the (Dongming Petrochemical Group) told traders the ban would have little impact because most of the oil arrives on tankers not under sanctions. However, UANI has called for...focus on repeat offenders receiving oil in ship to ship transfers. Chinese tankers have receiving oil in these transfers off ports such as Singapore and indonesia.
Analysts speculate China may have taken the step as part of larger trade negotiations it hopes to have with the new Trump administration. China is working to avoid Trump's plan for sweeping tariffs.
There will be some more sanction tools available if Congress passes the SHIP Act. Stop Harboring Iranian Petroleum. Passed the House in Nov. 2023, read twice in the Senate, put on the calendar also Nov. 2023. The only clue as to when it might be acted upon is that it had No. 240 referencing it. Why it hasn't been passed by the Senate is a mystery. You'd think anything targeting Iran would get passed quickly
This is not to be confused with the SHIPS for America Act. This act is to revitalize the U.S. Merchant Marine for peacetime increase for supply chain independence and wartime military commerce. There are just 80 US flagged ships in international commerce compared to 5,500 Chinese ships.
The key, I think, is for the U.S. and our allies follow the money and find and sanction those small teapot refiners mentioned earlier. China gets charged 12% to 15% less than the global market by Iran.
United Against a Nuclear Iran identified 70 vessels in 2020 as part of Iran's Ghost Fleet. That number grew to 383 in January, 2024. This doesn't even count the ships in the National Iranian Tanker Company. There isn't any data after 2015, when NITC had 43 very large crude carriers (VLCC), and other ships and were buying more. China has used the NITC ships for getting Iran's oil as well.
UANI put out a year end report:
The group is calling for a global cooperation and strategies that go beyond "traditional enforcement methods," in response to Iran's ability to quickly adapt to the current sanctions, and lax enforcement.
The group said that the 70 Iranian tankers it identified in 2020 has grown to 477 tankers now. 132 were added in 2024 alone.
The intelligence efforts they report led to 330 flag revocations as well as the US designating 139 tankers sanctioned this year. 110 were identified in it's a listing of the "ghost armada." It says that 325 vessels, however, have yet to be designated.
Another step UANI calls for says that, "authorities should hold captains accountable through targeted sanctions, fines, and potential legal action." The group cites the captain's role in sanction avoiding techniques such as in AIS manipulation, presenting false documents, and illicit ship-to-ship transfers.
UANI also calls for a continued crackdown on flag hopping, which is constantly changing the nation the ship is flagged under, even at times while at sea. A new tactic to cut down on the Iranian oil trade is blockchain trade verification, which is using computers to validate and record transactions.
The price of Iranian oil to China has spiked since the new sanctions were put in place.
A ramp up in sanctions by the Biden Administration last week (December) on Iran froze some ships that deliver Iranian oil to China via ship-to-ship transfers off Singapore and Malaysia, according to sources and LSEG shipping data.
Sounds like what happened to the ship Elva, parked at Singapore.
China's Imports of Iranian crude oil and condensate dropped by 524,000 barrels of oil per day, to a four month low of 1.31 million barrels per day in November versus the previous month, data from ship tracking firm KPLER showed.
KPLER sells software to use it's ship tracking data.
Panama has 528 oil tankers operating under its flag.
"King, Colleagues Urge Panama to Halt Illegal Iranian Oil 'Ghost Fleet'" Earlier last year, after receiving a letter from Senator King and his colleagues, the Panamanian Maritime Authority (AMP) made progress by opening investigations into all ships suspected of transporting Iranian oil and has since removed 32 vessels from its registry. "This additional step will help put a stop to Iran's ghost fleet, which is allowed to export hundreds of millions of barrels of oil in recent years, and which ultimately funds the regime's continued human rights violations, proxy forces and nuclear proliferation program."
The Senator's request was for extended use of the Registry Information Sharing Compact (RISC). The compact was signed on August 14th, 2019. Panama and Liberia helped launch the information sharing with the United States.
Countries that are part of the database are Panama, Liberia, Marshall Islands, Palau, Honduras, St. Kitts and Nevis, Comoros, Vanuatu, Cook Islands, Dominica, Moldova and Belize.
It includes a notification process for suspicion of illegal activities. Since Panama joined the pact, it has reported 135 vessels. It is also designed to prevent the flagging of ships in their countries in the first place.
The Registry Information Sharing Compact is a good start in combating Russia, Iran, and China from claiming innocence in illegal oil transactions. Other countries like United Arab Emirates and India need to stop shell companies from using their countries as fronts. Countries that allow flagging ships that have nothing to do with their country need to be put on notice that this practice needs to be stopped. Participating countries in RISC could offer these small countries more support than the small payments they make in flagging ships.
I like calling the Iranian tankers delivering oil to China the "Ghost Fleet." Keeps it separate from the "Shadow Fleet" of tankers delivering Russia's oil.
Things for Iran and China may actually get worse under Trump's new administration. He could also screw things up by firing the people at the Treasury Dept. and OFAC that do the research and impose the sanctions. You never know with Trump.
It could also be better or worse because of Trump's nominee for Treasury Secretary, Scott Bessent. His policies are unknown.
Iran's Ghost Fleet is being systematically chipped away, making it harder to operate every day. We'll know better in 2025 how effective sanctions and information sharing work to stop the illegal oil trade between Iran and China.
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