UAE firms sanctioned in Iranian oil shipment crackdown

The United States has imposed sanctions on four United Arab Emirates-based companies accused of being part of an international network engaged in the illicit sale and shipment of petroleum, petroleum products, and petrochemical products from Iranian firms to China and elsewhere in East Asia.

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) said in a statement that the network of companies located included those based in the UAE, China, Hong Kong, Singapore, Vietnam and Iran and that the group has facilitated the delivery and sale of hundreds of millions of dollars in products from Iranian firms to East Asia.

Among the UAE-based firms sanctioned by the US was Edgar Commercial Solutions FZE, which the Treasury said purchased and exported petrochemical products from sanctioned Iranian companies for shipment to China.

• ‘Ghost armada’ tankers go dark to ship sanctioned Iranian oil

Washington said Edgar used Hong Kong-based front company Lustro Industry Limited, who was also listed as one of the entities designated for sanctions, to hide its role in bulk purchases of petrochemical products.

Another UAE-based company, Ali Almutawa Petroleum and Petrochemical Trading LLC, was also named by the US of being a front company for Hong Kong-based Triliance Petrochemical Co. Ltd, and accused of sending and receiving tens of millions of dollars-worth of payments related to the sale and purchase of Iranian petroleum products, was also targeted.

Washington also accused UAE-based Petrokick LLC, one of Ali Almutawa’s customers, of purchasing tens of millions of dollars-worth of Iranian petroleum products. 

Petrokick LLC is allegedly said to have purchased millions of dollars-worth of oil products from Tehran-based Behran Oil for shipment to the UAE, and sold hundreds of millions of dollars-worth of Iranian oil products, the statement said.

AGBI could not immediately reach the concerned companies for comment.

In May AGBI reported that empty oil tankers in the Arabian Gulf were being tracked switching off their transponders and “vanishing”, only to reappear later full of sanctioned Iranian oil. 

These vessels were dubbed the so-called “ghost armada” and accused of supplying Asian markets, with experts telling AGBI their number and cargos have increased in the past year.

The practice began when Donald Trump reintroduced sanctions on Iranian oil in November 2018 and continues under his successor, President Joe Biden, whose efforts to resurrect the Iran nuclear deal have so far been unsuccessful.

International shipping rules are being contravened as well as US sanctions – vessels are required to keep their transponders on at all times.

The number of ships in the “ghost armada” has also risen significantly, according to a New York-based advocacy group called United Against Nuclear Iran. 

In November 2020, it identified 70 ships involved in this practice. In April this year, it said the number had risen to around 196.

The US Treasury’s announcement on Wednesday comes as Washington has increasingly targeted Chinese companies over the export of Iran’s petrochemicals, which has generated millions of dollars-worth of illicit revenue for the Iranian government, at a time when the US is pressuring Tehran to revive the 2015 nuclear deal.

Under the JCPOA agreement, Iran had limited its nuclear program in return for relief from economic sanctions. 

A senior US official told Reuters earlier this week that the chances of reviving the 2015 Iran nuclear deal are “worse” after indirect US-Iranian talks in Doha ended without progress.

“While the United States is committed to achieving an agreement with Iran that seeks a mutual return to compliance with the Joint Comprehensive Plan of Action, we will continue to use all our authorities to enforce sanctions on the sale of Iranian petroleum and petrochemicals,” Brian E Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, said in a press statement.

Chinese refineries have been buying large amounts of Iranian oil over the past two years despite US sanctions on Iran’s oil exports, which have helped keep Tehran afloat.

Last month, China opposed condemnation of Tehran for its refusal to cooperate with inspectors from the International Atomic Energy Agency (IAEA), the world’s centre for cooperation in the nuclear field and seeks to promote the safe, secure and peaceful use of nuclear technologies. 

A foreign ministry spokesman cited in a tweet issued by Beijing’s permanent mission to UN bodies in Vienna said he opposed “relevant countries’ moves to pressure” Tehran by raising a resolution at the IAEA quarterly board meeting in June.