Iran tankers go dark to keep selling oil

Sanctions will take effect November 5. (FIle/AFP)
Updated 03 November 2018

Iran tankers go dark to keep selling oil

  • In late October, every single one of Iran’s vessels “went dark,” switching off their transponders to avoid international tracking systems
  • It is part of efforts by Iran and its customers to keep oil flowing ahead of a new US embargo set to hit on November 5

TEHRAN: Working from their small offices in Stockholm, analysts at a new watchdog that monitors global oil shipments have been run ragged by Iran’s efforts to skirt US sanctions this month.
In late October, every single one of Iran’s vessels “went dark,” switching off their transponders to avoid international tracking systems — a first since TankerTrackers.com began operating in 2016.
The ships can now only be tracked manually using satellite imagery.
“It’s the first time I’ve seen a blanket black-out. It’s very unique,” co-founder Samir Madani told AFP.
It is part of efforts by Iran and its customers to keep oil flowing ahead of a new US embargo set to hit on Monday.
“Iran has around 30 vessels in the Gulf area, so the past 10 days have been very tricky, but it hasn’t slowed us down. We are keeping watch visually,” added co-founder Lisa Ward.
Huge improvements in commercially available satellite imagery in recent years have allowed firms like TankerTrackers to watch the progress of vessels on a daily basis, where once images would have come only once a week or more.
Iran hopes less transparency will allow it to keep selling oil after November 5 when the United States reimposes the last set of sanctions lifted under the 2015 nuclear deal, which Washington abandoned in May.
But Joel Hancock, from analysis firm Natixis, said this did not mean their sales would necessarily remain high.
“The main issue with tanker trackers is they are tracking exports, maybe not sales,” he told AFP, adding that the ships could just be moving oil to storage facilities in China or elsewhere.
Another method — used during the last sanctions period between 2010 and 2015 — is to keep oil on huge tankers off the Gulf Coast.
TankerTrackers says there are currently six vessels, with a total of 11 million barrels of capacity, parked offshore as floating storage containers — freeing up port capacity and allowing for quick deliveries.
Although precise figures are rarely available in the notoriously opaque oil market, most analysts say Iran’s exports dropped from around 2.5 million barrels per day in April to roughly 1.6 million in October.
Countries with close security and trade ties with the US were quick to cut their purchases — South Korea went almost straight to zero, with Japan and much of Europe close behind.
Although the European Union has vowed to create a “special purpose vehicle” (SPV) to protect companies buying oil, analysts see little chance that firms will risk US penalties by using it.
“The SPV is currently dead in the water. It can’t handle oil in any serious volume,” said Henry Rome, a specialist on Iran sanctions for the Washington-based Eurasia Group consultancy.
The US granted waivers to eight countries but only on condition they make substantial cuts to their purchases.
But the trickiest customers for the US in its “maximum pressure” campaign are the biggest buyers, India and China.
China, the largest buyer of Iranian oil, has been surprisingly willing to play ball with sanctions so far, in part because it has bigger fish to fry in the form of its ongoing trade war with Washington.
During the last sanctions period, China funneled almost all its Iranian transactions through the Bank of Kunlun, controlled by Chinese state energy group CNPC, which was sanctioned by the US in 2012 but shielded the rest of the sector from penalties.
“Kunlun was a sacrificial lamb in the past... but Chinese banks appear to have realized the immense risk and are a lot more cautious,” said Rome.
Unconfirmed reports suggested this month that the Bank of Kunlun was quietly halting transactions with Iran.
But China is likely to seek new paths to keep the oil flowing, according to Rome.
“It looks like they’ll open another channel, maybe another bank, and keep importing sizable amounts, but there’s still a lot to work out,” he said.
India, another major buyer, will also be looking for mechanisms as they did during the last sanctions period.
“The difference last time was that sanctions were phased in gradually over a long period,” said Rome.
“There’s a certain panic this time that they are being required to make very substantial reductions immediately, and also that banking systems are much more intertwined than in the past.”
Even if Iran can continue to sneak oil out of its ports, it will find it difficult to get the cash into its accounts.
“Iran is a formidable adversary, well practiced in different techniques to keep selling oil and muddle the data, but that won’t be a panacea for everything,” said Rome.


18 killed in clashes in northwestern Syria

A heavily damaged building following Russian airstrikes and shelling on the town of Binnish in Syria’s northwestern Idlib province on Monday. Three members of the same family were killed in the strike. (AFP)
Updated 51 min 59 sec ago

18 killed in clashes in northwestern Syria

  • Russian airstrikes on the town of Binnish in Idlib province killed three people from the same family on Monday, according to the Observatory. An AFP photographer saw plumes of smoke rising from the site of the attack

BEIRUT, JERUSALEM: Clashes between opposition groups and pro-Assad fighters in northwestern Syria on Monday thwarted regime’s advance and left 12 pro-regime men dead, a Britain-based war monitoring group said.
Another 17 pro-regime fighters were wounded while on the opposition-led side six fighters died, said the Syrian Observatory for Human Rights.
The forces loyal to Bashar Assad had launched an attack with artillery and heavy gunfire in Syria’s last major opposition bastion, said the war monitor.
But the Hayat Tahrir Al-Sham (HTS) alliance, headed by ex-leaders of Syria’s former Al-Qaeda affiliate, and their allies reportedly thwarted the advance.
Four HTS and two other opposition fighters were killed in the clashes in a rural area of Latakia province, the monitor said.
The HTS-led alliance also controls large areas of Idlib province and slivers of territory in neighboring Aleppo and Hama.
The region they hold is home to some 3 million people, nearly half of whom have been displaced from other parts of the country.
Syria’s 9-year-old war has killed more than 380,000 people and displaced nearly half of the country’s pre-war population.
The opposition-held area is a regular target of attacks by regime forces and their Russian and Iranian allies.
A Russian-backed regime offensive between December and March displaced nearly a million people in the region.
A Moscow-backed cease-fire agreement in March has reduced violence in the area, but shelling and airstrikes by the regime and its backers continue.
Russian airstrikes on the town of Binnish in Idlib province killed three people from the same family on Monday, according to the Observatory. An AFP photographer saw plumes of smoke rising from the site of the attack.

Golan Heights Activity
The Israeli military said it thwarted an infiltration attempt from Syria early on Monday staged by four suspected militants it accused of trying to plant explosives.
Lt. Col. Jonathan Conricus, a military spokesman, said Israeli troops earlier spotted “irregular” activity in the Golan Heights. Israeli troops opened fire on the suspected militants, some of whom were armed, after observing them placing the explosives on the ground, Conricus said.

HIGHLIGHTS

• Forces loyal to Bashar Assad had launched an attack with artillery and heavy gunfire in Syria’s last major opposition bastion.

• The opposition-held area is a regular target of attacks by regime forces and their Russian and Iranian allies.

There was no official confirmation that the four suspected attackers were killed but a grainy video released by the army shows four figures walking away from barbed wire marking the frontier. The four then disappear in a large explosion that engulfs the area.
The Israeli military has not said if the four are suspected of ties to Iran or Hezbollah, two Syrian allies. However, Conricus said Israel held the Syrian regime responsible for the incident.
Addressing Likud party lawmakers, Prime Minister Benjamin Netanyahu said on Monday that Israel “thwarted an attempted sabotage on the Syrian front” and would continue to “harm all those who try to harm us and all those who harm us.”
The incident comes amid heightened tension on Israel’s northern frontier following a recent Israeli airstrike that killed a Hezbollah fighter in Syria. Following the airstrike, the Israeli-controlled Golan Heights was hit by explosives fired from Syria and Israel responded by attacking Syrian military positions and beefing up its forces in the area.
Israel has been bracing for further retaliation and last week it said it thwarted an infiltration attempt from Lebanon by Hezbollah militants, setting off one of the heaviest exchanges of fire along the volatile Israel-Lebanon frontier since a 2006 war between the bitter enemies.