Shanghai is expected to return…
Saudi Aramco has dethroned Apple…
The world’s largest shipping companies have strengthened their regulations and scrutiny to avoid becoming unwittingly involved in illicit ship-to-ship transfers of crude oil, especially out of Iran and Venezuela which are under U.S. sanctions, executives told Reuters.
As the United States tightened the sanctions against Iran and Venezuela’s oil exports over the last two years, the countries have become increasingly inventive in seeking ways to push their crude on the international market, hiding the true origin. If caught in such schemes, shipping firms risk secondary sanctions in the form of either being cut off from the U.S. financial markets or having vessels seized.
With Iran and Venezuela eager to sell their crude even under American sanctions, the biggest shippers cannot risk reputational damage.
It is increasingly difficult to track Iranian and Venezuelan crude oil exports because of the cargo-masking and ship-to-ship (STS) transfers that Iran and Venezuela use to circumvent the U.S. sanctions.
Nevertheless, the shipping firms are tightening control over transfers at sea, often conducting their own investigations into where the crude oil comes from. This spares the shipping companies the image and financial damage of being involved, without their knowledge, in such illegal activities.
“The increase in practices to evade sanctions, and the increased creativity applied to these require companies to have the ability to respond with stronger measures,” Eva Birgitte Bisgaard, chief compliance officer at Maersk Tankers, told Reuters.
Maersk Tankers itself almost loaded Iranian crude a few months ago after STS transfers, but those transfers were stopped before the Denmark-based tanker operating giant took any Iranian oil after a tip from U.S. nonprofit and non-partisan policy organization United Against Nuclear Iran (UANI).
Maersk Tankers is using technology to track vessels and is closely investigating the ownership structures of the companies and tankers it works with, according to Reuters.
The UANI organization has found that Iran alone is using dozens of tankers to hide the origin of its oil. UANI has been sending its findings to flag registries, which have also stepped up the scrutiny and conducted investigations and hearings. The registries have also banned vessels or de-flagged vessels altogether.
“Between one-third to one half of Iran’s oil is exported via furtive STS transfers, loaded from Iranian to foreign tankers in the open seas, away from terrestrial tracking. It must be stopped,” UANI says.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.