June 2023 Iran Tanker Tracker

In the first week of June, the Stop Harboring Iranian Petroleum Act (SHIP Act) of 2023 (H.R. 3774) was introduced in the House by Representatives Reps. Mike Lawler (R-NY) and Jared Moskowitz (D-FL), and in the Senate by Sens. Marco Rubio (R-FL) and Maggie Hassan (D-NH).  With its explicit focus on China’s central role in the Iran oil trade, SHIP is potentially critical legislation that seeks to “impose additional sanctions with respect to the importation or facilitation of the importation of petroleum products from Iran.”  Crucially, the bill recommends specific sanctions against any foreign person who “owns or operates a refinery that knowingly processes, refines, or otherwise deals in petroleum or petroleum products originating from Iran” [Section 3(b)(4)].  This means the clock is surely ticking for China’s “teapot” refineries.  This year, UANI wrote to top teapot importers Shandong Shengxing, Hengli Petrochemical, Lawen Namu, Chambroad, and Hualong Petroleum, and warned:

Given bipartisan support in conjunction with proliferating media attention, it is obvious that the current state-of-affairs in which China imports almost one million barrels of Iranian oil each day – with the decisive help of so-called “teapot refiners” primarily located in Shandong Provence – cannot stand. This unsustainable scenario will inevitably lead to further actions in which the United States will start to punish the worst and most important offenders, beyond actions already taken.

As well as Chinese importers, the SHIP Act also takes aim at the 340-strong list of foreign-owned/operated/flagged “Ghost Armada” vessels – those responsible for “knowingly transporting” Iranian-origin petroleum and petroleum products (more on this below).  Given that June set another record for Iranian oil exports, the SHIP Act should be signed into law and implemented quickly. It would be inconceivable for President Biden to veto such a Bill, unless of course an “arrangement” or “mini-deal” with Iran that permits limited resumption of Iranian oil exports is concluded in the near future.

* Figures to be updated over the following weeks

View Iran Tanker Tracking

Analysis of New Additions to the Ghost Armada

Since the Trump Administration withdrew from the JCPOA Iran nuclear deal, the Islamic Republic has bolstered oil exports by gradually expanding the number of vessels in the Ghost Armada.  Iran adds new vessels to this fleet each month, enabling it to covertly transport and export oil without drawing attention from the global community. The elusive fleet allows Iran to evade sanctions restrictions and continue profiting from its most lucrative commodity.         

The monthly addition of new vessels to the Ghost Armada serves multiple purposes for Iran. First, it increases the capacity and flexibility of their oil export operations. With each new ship, Iran can transport larger volumes of oil, expanding its reach and increasing revenue streams. Second, the continual growth of the Ghost Armada ensures a degree of resilience, as its own fleet is sanctioned. Since these vessels are not flagged by Iran or registered with ownership in Iran, third-party monitoring is more difficult.

Tehran has added at least one new vessel to the Ghost Armada every month. Over the past year, the rate of addition has increased markedly. In November 2022 alone, 22 new vessels were added. Since April 2021 Iran has added an average of nine vessels to its fleet per month.

Iran’s ever-expanding Ghost Armada – which resorts to dangerous tactics every day in order to skirt sanctions – not only damages international maritime norms and regulations. It also undermines global energy markets with respect to transparency and fair competition. Via furtive discounts, Tehran gains an unfair advantage over other oil-producing and law-abiding exporters.

It remains absolutely essential that the U.S. enforces sanctions on Iranian oil exports, which means targeting the Ghost Armada and the oil refineries.  The widely supported and bi-partisan SHIP Act, will help to refocus these efforts.