The U.S. Justice Department is reviving a dormant 19th-century maritime law, known as prize law, to seize and sell Iranian oil and ships captured during its blockade. This legal route aims to expedite the process compared to current civil forfeiture methods and increase economic pressure on Iran.
The U.S. is exploring an archaic legal tool to increase economic pressure on Iran and potentially generate revenue from seized assets, but this move carries significant legal, practical, and geopolitical risks.
The U.S. government is considering reviving an obscure, centuries-old maritime law known as prize law to deal with Iranian oil and ships captured as part of its blockade. The Justice Department, in conjunction with the Pentagon, is preparing to use this legal mechanism, which historically allowed courts to decide if vessels and cargo seized during armed conflict could become U.S. property. This approach, largely dormant since the 19th century and World War II, is seen as a practical way to bypass the complexities and delays often associated with civil forfeiture cases for sanctions violations.
Prize proceedings could potentially resolve competing claims from shipping companies, creditors, or terrorism victims more efficiently, allowing captured oil to be sold more quickly with proceeds directed to the U.S. Treasury. Houston, Texas, is being considered as a venue due to its proximity to major ports and petrochemical infrastructure. U.S. Attorney Aaron Reitz described the effort as "reviving" prize courts, calling it an "ancient body of maritime law."
The move comes as Washington seeks to intensify economic pressure on Iran, with U.S. forces having already intercepted several Iranian-owned or Iran-linked vessels since April. Utilizing prize law could transform these captures into a direct financial tool, generating revenue while cutting off Iran's access to valuable exports. Supporters also believe it reinforces the seriousness of the blockade as a wartime measure.
However, significant uncertainties surround the application of this historical framework under modern international law. Maritime attorney Allison Luzwick noted that the area is "not tested in modern times," and courts may question the legal grounds for invoking prize authority, especially concerning congressional authorization for hostilities. Furthermore, federal judges, prosecutors, and the Navy lack contemporary experience with prize cases, necessitating the rebuilding of procedures. Shipowners with financial claims are also expected to contest seizures.
Critics also warn of broader geopolitical risks, suggesting that normalizing prize law could create a precedent that a rival power like China might later use against American or neutral merchant vessels in a future conflict. The proposal thus offers a potentially faster route to convert captured Iranian oil into revenue and tighten pressure on Tehran, but at the cost of reopening a largely untouched area of wartime law.