Obama Slaps Sanctions on Iran Tanker Co

The Obama administration sanctioned the National Iranian Tanker Co. and four alleged front companies for Iran’s oil trade, the latest salvo in a U.S.-led campaign to curtail Iran’s petroleum sales until it abandons illicit aspects of its disputed nuclear program.

The U.S. Treasury Department announced on 11 July it would freeze American assets belonging to the tanker operator, known as NITC, and block the company’s transactions from the U.S. financial system. The Treasury said Iran’s government controls the company, a former subsidiary of the state-owned National Iranian Oil Co. that was officially privatized 12 years ago.

The Treasury identified 27 entities affiliated with the tanker company and 58 vessels — some of which have been reflagged in other countries to evade international sanctions on Iran’s petroleum sales.

The U.S. action doesn’t impose penalties on non-American companies that continue to do business with NITC. The move is intended to expose the tanker company’s links to the Iranian regime and discourage refiners, traders and shippers from dealing in Iranian oil that may be disguised as crude from another country, according to three officials in President Barack Obama’s administration who spoke on condition of anonymity because they were not authorized to be named.

Oil Rose

Oil rose after the U.S. announced the sanctions aimed at the second-biggest crude producer in the Organization of Petroleum Exporting Countries. Crude oil for August delivery increased 27 cents to settle at $86.08 a barrel on the New York Mercantile Exchange. Prices have decreased 13 percent this year, even as the U.S. and European Union have imposed oil-related sanctions that went into effect recently.

The Treasury moves are part of a broader effort by the U.S. and EU to increase economic penalties on Iran to pressure its leaders to make concessions over its nuclear program. Iran’s main source of revenue is petroleum exports, accounting for more than half of gross domestic product, according to the International Monetary Fund.

The EU embargoed Iranian oil and banned EU companies from insuring Iranian crude shipments effective July 1. The Treasury’s list of NITC’s tankers will help European shippers and insurers comply with the EU ban, U.S. officials said.

Reflagging Tankers

In the past month, NITC changed the flags on 11 tankers to the Tanzania Zanzibar International Register of Shipping and 20 others to Tuvalu, according to the Equasis shipping database maintained by the European Commission. The ships were registered under new names and companies, while NITC remained the operator, data show.

Iran’s customers in Asia may be relying on NITC to deliver the country’s oil as EU sanctions block insurance for international tankers carrying the cargoes. India, the third-largest buyer of Iranian oil, asked the Persian Gulf country to arrange transportation and insurance for its shipments, and Iran offered to do the same for South Korea after the Asian nation said it would halt shipments because of Western sanctions.

NITC’s tankers are the only ones heading for Kharg Island, Iran’s largest export terminal; no other ships have signaled from the port since the EU embargo on Iranian oil took effect July 1, according to ship-tracking data compiled by Bloomberg. The EU ban affects insurers of 95 percent of the global fleet.