Key facts
- Iran uses a 'shadow fleet' of approximately 400 tankers to export oil and circumvent US sanctions.
- These vessels often disable tracking signals or broadcast false locations and use ship-to-ship transfers to obscure cargo origin.
- China is the primary buyer of Iranian oil, disguising imports and paying in Chinese renminbi.
- The fleet's operation is a response to US sanctions, particularly secondary sanctions on entities involved in transporting or financing Iranian oil.
- Environmental concerns exist due to the age of many tankers, increasing the risk of leaks and collisions.
- The US has reimposed a naval blockade of Iranian ports to intercept these vessels.
Washington has reimposed a naval blockade on Iranian ports, aiming to intercept vessels involved in the country's 'shadow fleet' which facilitates oil exports despite international sanctions. This fleet, often described as 'dark' or 'ghost' fleets, comprises aging tankers that operate in a legal grey zone, employing tactics like disabling tracking signals, broadcasting false locations, and conducting ship-to-ship transfers to obscure the origin and ownership of oil.
These shadow tankers are typically registered under 'flags of convenience' in countries with lax regulations, such as Bermuda, Liberia, Panama, Malta, and the Marshall Islands. Ownership is often linked to Iranian billionaires affiliated with the Islamic Revolutionary Guard Corps or Chinese businessmen, with crews drawn from Iran, China, and South Asia. Analysts estimate the fleet numbers around 400 ships.
The shadow fleet's existence is a direct response to US sanctions, particularly secondary sanctions that penalize any organization worldwide engaging with Iran's energy sector. While there are no UN sanctions on Iranian oil itself, the US measures effectively cut off Iran from much of the international shipping industry reliant on US banks and dollar transactions.
China is identified as the largest buyer of Iranian oil, though it officially records these imports as coming from other nations like Malaysia and Indonesia. Payments are made in Chinese renminbi through Chinese banks, primarily to smaller, privately-owned refineries in Shandong province. This practice allows China to secure oil at a discount while insulating its larger state-owned refineries from US sanctions.
Environmental concerns are significant, as many of the tankers are over 20 years old, increasing the risk of oil leaks and collisions. The collision of the Iranian-owned tanker Sanchi in 2018, which sank and released nearly a million barrels of oil, serves as a stark example of the potential environmental damage. The US and UK have previously attempted to intercept ships involved in Iranian, Russian, and Venezuelan oil shipments.