Iran oil tanker Adrian Darya 1 pursued by US turns off its tracker near Syria

Adrian Darya 1, which is at the center of a confrontation between Washington and Tehran, was formerly called Grace 1, and was detained by Britain off Gibraltar in July 2019 due to British suspicion it was carrying Iranian oil to Syria in violation of European Union sanctions. (AP/File Photo)
Updated 03 September 2019

Iran oil tanker Adrian Darya 1 pursued by US turns off its tracker near Syria

  • Disappearance of Adrian Darya 1 follows a pattern of Iranian oil tankers turning off tracking systems
  • Renewed speculation on Tuesday that it will head to Syria

DUBAI: An Iranian oil tanker pursued by the US turned off its tracking beacon, leading to renewed speculation on Tuesday that it will head to Syria.
The disappearance of the Adrian Darya 1, formerly known as the Grace 1, follows a pattern of Iranian oil tankers turning off their Automatic Identification System to try and mask where they deliver their cargo amid US sanctions targeting Iran’s energy industry.
Meanwhile, Iranian President Hassan Rouhani reiterated on Tuesday that Tehran will not enter into direct talks with the US unless Washington rejoins the 2015 nuclear deal that President Donald Trump withdrew America from over a year ago.
Trump’s withdrawal and the imposition of heavy economic sanctions on Iran have blocked it from selling its crude oil abroad, a crucial source of government funding for the Islamic Republic. Meanwhile, tensions have spiked across the Arabian Gulf over mysterious tanker explosions, the shooting down of a US military surveillance drone by Iran and America deploying more troops and warplanes to the region.
The Adrian Darya, which carries 2.1 million barrels of Iranian crude worth some $130 million, switched off its AIS beacon just before 1600 GMT Monday, according to the ship-tracking website MarineTraffic.com. The ship was some 45 nautical miles (83 kilometers) off the coast of Lebanon and Syria, heading north at its last report.
Earlier, Secretary of State Mike Pompeo had alleged the US had intelligence that the Adrian Darya would head to the Syrian port of Tartus, just a short distance from its last reported position.
The actions of the Adrian Darya follow a pattern of other Iranian ships turning off their trackers once they reach near Cyprus in the Mediterranean Sea, said Ranjith Raja, a lead analyst at the data firm Refinitiv.
Based on the fact Turkey has stopped taking Iranian crude oil and Syria historically has taken around 1 million barrels of crude oil a month from Iran, Raja said it was likely the ship would be offloading its cargo in Syria. That could see it transfer crude oil on smaller vessels, allowing it to be taken to port, he said.
“The Iranian oil going to Syria is not something new,” Raja said. “This is a known fact.”
The oil shipment website Tanker Trackers similarly believes the Adrian Darya to be off Syria.
“It is now safe to assume she is in Syria’s territorial waters,” Tanker Trackers wrote on Twitter on Tuesday.
Iranian officials haven’t identified who bought the Adrian Darya’s cargo, only that it has been sold.
The US, which has sought to seize the tanker, alleged in federal court that the ship is owned by Iran’s Revolutionary Guard, a paramilitary organization answerable only to Supreme Leader Ayatollah Ali Khamenei.
The US recently declared the Guard a terrorist organization, giving it greater power to pursue seizing its assets.
US officials since have warned countries not to aid the Adrian Darya, which previously said it would be heading to Greece and Turkey before turning off its tracker Monday. Authorities in Gibraltar alleged the ship was bound for a refinery in Baniyas, Syria, when they seized it in early July. They ultimately let it go after holding it for weeks.
Meanwhile, Rouhani addressed Iran’s parliament on Tuesday and touched on ongoing negotiations aimed at saving the country’s unraveling nuclear deal. Under the landmark 2015 agreement, Iran agreed to limit its enrichment of uranium in exchange for the lifting of economic sanctions.
The International Atomic Energy Agency confirmed last week that Iran’s stockpile of low-enriched uranium still exceeds the amount allowed by the deal.
The UN agency also said Iran continues to enrich uranium up to 4.5%, above the 3.67% allowed under the deal but still far below weapons-grade levels of 90%.
Iran has warned it will take additional steps away from the accord on Friday if it doesn’t get help from Europe to sell its oil abroad, calling it their “third step” away from the deal. An Iranian lawmaker has suggested France is proposing a $15 billion credit line for Tehran if it returns to the deal.
Rouhani told lawmakers that Iran wouldn’t negotiate directly with the US unless it returned to the deal. That’s after speculation grew of a possible meeting between Trump and Iranian officials following an appearance by Iranian Foreign Minister Mohammad Javad Zarif at the Group of Seven meeting in August.
“Unfortunately after America’s violation (of the deal) and treachery and its getting out of its commitments, the Europeans too either failed to carry out their duties, or couldn’t do so, or both,” Rouhani told parliament.
Rouhani added: “If (the Europeans) don’t do anything significant, we surely will take the third step in the coming days.”
Iran’s Deputy Foreign Minister Abbas Araghchi echoed that sentiment, lashing out at both Trump for pulling out of the nuclear deal and at Europeans for failing to implement a solution that would compensate for the US withdrawal.
“They promised to find practical solutions in order to let Iran still benefit from the sanctions lifting to compensate the absence of the US,” Araghchi told a European economic gathering in Slovenia. “What happened? ... The Europeans are still not able to create a simple banking channel to let business between Iran and Europe, to let their own companies do business with Iran.”


Yemen’s rival powers battle over banknotes

Updated 18 January 2020

Yemen’s rival powers battle over banknotes

  • The Houthis outlawed the use and possession of crisp new Yemeni riyal bills
  • The riyal stood at about 560 to the dollar across Yemen before the ban was announced in mid-December

SANAA/ADEN: Yemen’s warring sides opened a new front in their five-year conflict on Saturday - a battle over old and new banknotes that threatens to create two economies in the same state.

As of midnight, the Houthi movement which controls the capital Sanaa outlawed the use and possession of crisp new Yemeni riyal bills issued by its rivals in the internationally recognised government based in the southern port town of Aden.

The Iran-allied Houthis, who say people should only use the old bills, have defended the ban as a move against inflation and what they call rampant money-printing by the government.

The government has branded the ban an act of economic vandalism. And the population, as ever, have been left stuck in the crossfire.

Yemenis from both sides told Reuters the ban had effectively created two currencies with diverging values, adding to the turmoil in a state already governed by two powers and brought to its knees by the war.

In the one-month build up to the ban, people in Houthi-controlled areas have been queuing to try to exchange their new riyal notes for old, turning the grubby and torn bills into a prized and relatively scarce commodity.

The riyal stood at about 560 to the dollar across Yemen before the ban was announced in mid-December. The rate has since slipped a little in Houthi-controlled areas to around 582, but slumped much further to 642 in the south, an area now awash with new bills.

That relative strength might look like a boon for northerners, if only they could get hold of enough of the old notes in time to keep afloat in the largely cash-based economy.

“We go for the exchange and they won’t take [the new notes] from us. Or say they need three, four or five days,” craftsman Abdullah Saleh al-Dahmasi told Reuters on a Sanaa street a week before the ban came into force.

“The new one isn’t accepted and the old one is worn out, they have to find a solution,” the 27-year-old said.

A few days before the ban came in, around 20 angry men and women were turned away from one exchange which said it had filled its quota for the day. Many had been coming there for three days in the hope of swapping their cash.

North-south trade has become far more expensive as traders have to buy and sell two types of riyal - told apart by the state of the paper and the different sizes and designs.

TWO CENTRAL BANKS

Many people in Sanaa told Reuters they felt the ban was needed to constrain inflation. But they were facing difficulties in the short-term.

“When people saw that new currency come into circulation, they held onto it as it was new and shiny. But now it’s a problem that they have it,” said 28-year-old Abdallah Bashiri, a private sector worker in Sanaa.

In that city, legal exchanges will swap 100,000 Yemeni riyals (around $172) in new notes for electronic currency that can be spent on things like phone credit or electricity bills, for a small fee of around $1.50.

But things get more challenging when it comes to actual paper that can be spent in food markets. Sanaa residents said unofficial exchanges are offering to change 100,000 riyals of new notes into 90-96,000 riyals of the scarcer old.

After the Houthis stormed the capital Sanaa in 2014 and ousted the government of President Abd Rabbu Mansour Hadi, Yemen’s central bank split into two branches - one in Sanaa, under Houthi control, and one internationally recognised branch in Aden, which has access to money printers.

The Aden authorities have defended their decision to step up the printing of new money from 2017, saying it was an attempt to deal with a building cash crunch and pay public sector salaries.

“The Houthis ... did not consider the economic cost to society,” Yousef Saeed Ahmad, adviser to the governor of Aden’s central bank, told Reuters there this week.

“We hope the measures taken are short-term. They cannot be kept up because the economy is one, it is interrelated and commodities flow from Sanaa to Aden and vice versa. This measure will aggregate the living conditions of all Yemenis,” he said.

The Houthis have defended their ban as a way of defending the value of the currency.

“The Sanaa central bank had to take measures to stem the dangerous practices the Aden central bank was carrying out through their monetary policy,” said Sami Al-Siyaghi, in charge of foreign banking operations at the Sanaa central bank.

“The imposition of [Aden’s] monetary stance on us led to the collapse of the national currency against foreign currency ... With each new issuance you notice a commensurate collapse in the riyal against foreign currency,” Siyashi told Reuters.