US slaps fresh sanctions on Iranian "shadow fleet"

On December 3, the United States announced new sanctions targeting 35 companies and vessels allegedly involved in facilitating Iran's oil sales, which have surged over threefold between 2020 and 2023 under the Biden administration.  

The US Department of Treasury stated that the sanctioned entities and ships "play a critical role in transporting illicit Iranian petroleum to foreign markets," Caliber.Az reports, citing foreign media. 

The department emphasized that revenues from these oil sales enable Tehran to finance its nuclear program, enhance its capabilities in drones and missiles, and provide financial and material support to its regional proxies.  

The sanctions come just weeks before the inauguration of President-elect Donald Trump. The Biden administration has faced ongoing criticism from Republicans and Iranian opposition groups for insufficient enforcement of existing oil sanctions against the Islamic Republic.  

Senator Jim Risch, Ranking Member of the US Senate Foreign Relations Committee, criticized the administration, stating it is "late on nearly every requirement under the SHIP Act," legislation targeting Iran's oil exports in defiance of US sanctions.  

Under the previous Trump administration, Iran’s oil exports had been curtailed to 200,000 barrels per day (bpd) through the “maximum pressure” campaign, according to tanker tracking data. By contrast, exports climbed to over 2.2 million bpd by August 2023, primarily to China via a "shadow fleet."  

According to the Treasury, "Iran relies upon a sprawling network of tankers and ship management firms in multiple jurisdictions to transport its petroleum to overseas customers — using tactics such as false documentation, manipulation of vessel tracking systems, and constant changes to the names and flags of vessels."

Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith reiterated the US's stance, stating, “The United States remains committed to disrupting the shadow fleet of vessels and operators that facilitate these illicit activities, using the full range of our tools and authorities.”  

Iran, anticipating potential challenges under the incoming US administration, has indicated plans to maintain oil production and exports. Last month, Iran's oil minister affirmed that the country is prepared for possible restrictions from a Trump presidency.  

Meanwhile, the Biden administration granted some sanctions relief. Just hours after the new oil sanctions were unveiled, the US State Department announced a renewal of a 120-day waiver on November 7, allowing Iraq to pay Iran for electricity.  

"Since 2018 ... the State Department has permitted Iraq to purchase Iranian electricity, while Iraq continues to develop its own domestic generation capacity," State Department deputy spokesman Vedant Patel told reporters.  

It remains unclear if the new oil sanctions are linked to the waivers or if they are intended to preempt criticism over the sanctions relief.

By Khagan Isayev