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US Indicts Iranian Oil Network, Individuals, Tankers, and Seeks Oil Cargo

Iranian tankers
U.S. indictment says tankers were used in the smuggling of the oil and ship-to-ship transfers to deliver the oil to China (file photo)

Published Feb 2, 2024 7:47 PM by The Maritime Executive

 

The U.S. Justice Department revealed on Friday three sweeping legal cases launched in U.S. federal courts in New York and the District of Columbia aimed at interrupting the Iranian oil trade. They revealed a widespread network launched by Iran starting in 2018 to avoid Trump-era sanctions as well as targeting a range of companies, individuals, and another tanker operation involved in the trade. In addition to the prosecution of multiple individuals, the U.S. is seizing more than $100 million, sanctioning a Chinese front company, and moving for a civil forfeiture of more than 500,000 barrels of Iranian oil.

The details of the three cases were announced just hours before the U.S. confirmed it had also launched air assaults on more than 85 targets in seven strike locations in Iraq and Syria. Using long-range bombers sent from the United States and other elements, the U.S. said it unleashed more than 125 precision-guided munitions. National Security Council spokesperson John Kirby said the early assessment was that they had hit their targets aimed both in retaliation for the attacks on U.S. forces in the region and to send a message to Iran over its aggression through proxies across the region.

Attorney General Merrick Garland announced the three legal cases saying that Iran was utilizing the proceeds of its black-market oil sales to fund its criminal activities. He said the cases would disrupt Iran’s unlawful funding streams while they were also changing nine individuals for their roles in supporting Iran’s efforts. 

The case in the Southern District of New York names seven defendants who are charged with terrorism, sanction evasion, fraud, and money laundering. Included are a senior Iranian official, the son of an Iranian commander and Minister of Petroleum, an Iranian shipping official, and others in a five-count indictment. The U.S. also seized $108 million that an Iranian front company named China Oil & Petroleum Company was attempting to launder through accounts at unnamed U.S. financial institutions. The company was also added to the sanction list for its role in oil trafficking.

The incitement spells out an elaborate global network for the oil laundering and smuggling effort which also involves companies in Turkey, Oman, Greece, and elsewhere. The U.S. said a ship management company based in India was used to buy, lease, and manage oil tankers used in the scheme. They spelled out how front companies were established, documents falsified, and ship-to-ship transfers as well as manipulating location and shipping data for the vessels to obscure the loading and unloading of the Iranian oil cargoes. 

One of the cases in the District of Columbia charges a Chinese woman and an Omani man with sanction evasion and money laundering. They allege the two individuals were involved with the trafficking and selling of Iranian oil to Chinese government-owned refineries. The 12-count indictment against the two was unsealed along with a warrant to seize $8.5 million.

As part of this scheme, the Omani is alleged to have taken a loan from U.S. financial companies to purchase an oil tanker. Named the Oman Pride, they allege the vessel was used to transport Iranian oil starting in 2020 and made ship-to-ship transfers to deliver the oil to China.

A separate civil case in the District of Columbia seeks the forfeiture of more than 500,000 barrels of Iranian oil valued at over $25 million. It says the oil was previously onboard the tanker Abyss. The tanker is registered in Palau and currently holding west of Korea, but the release did not make it clear where the oil is currently.

“Today’s enforcement actions show that the Justice Department is committed to using every tool – from criminal prosecutions to the lawful seizures of Iranian oil and oil profits – to shut down Iran’s pipeline of petroleum and profits,” said Deputy Attorney General Lisa Monaco. “The charges and seizures announced today strike at the core of the global oil smuggling network that Iran has built to fund its regime of terror and repression, and deny the regime millions of dollars in proceeds to further its nefarious agenda.”