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Iran’s Seizure of Greek Tankers Adds Risk to Key Oil Trading Route

The Liberian-flagged oil tanker Ice Energy transfers crude oil from the Iranian-flagged oil tanker Lana (former Pegas), off the shore of Karystos, on the Island of Evia, Greece, May 26, 2022. REUTERS/Costas Baltas

Iran’s Seizure of Greek Tankers Adds Risk to Key Oil Trading Route

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May 30, 2022

By Anthony Di Paola (Bloomberg) —

Iran’s seizure of two Greek oil tankers in the Persian Gulf raises the risk of further interruptions to shipments from a region that’s a vital source of global energy supplies.

On Friday, the Islamic Revolutionary Guard Corps diverted two Greek tankers, each loaded with about 1 million barrels of oil, into Iranian territorial waters — an apparent tit-for-tat for a vessel that the European country seized.

Greece is the world’s largest oil tanker-owning nation, making any spat with Iran potentially serious for the global market. Likewise, about one fifth of daily crude supply passes through the Strait of Hormuz, the narrow waterway separating the Persian Gulf from the Indian Ocean and crude buyers all over the world.

“Shippers will need to be more vigilant,” said Matt Stanley, a trader and broker with Starfuels in Dubai.  “Iran will be extremely protective of any and all assets.”

Greece alerted all vessels from the country to “adapt to the unacceptable situation” when sailing in the Persian Gulf. About 27% of the global fleet of oil tankers is Greek owned, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.

Brent crude rose 0.5% to about $120 a barrel on Monday having gained 1.7% on Friday, according to ICE Futures Europe data.

Greek Move

The seized tankers, Prudent Warrior and Delta Poseidon, were taken by Iranian forces in the Persian Gulf on Friday, according to the US 5th Fleet in Bahrain. Both are Greek-owned and flagged, and had loaded cargoes in Iraq, according to tanker tracking data compiled by Bloomberg.

The seizure of the vessels came not long after Greek authorities stopped an Iranian-flagged tanker and, in coordination with US authorities seeking to enforce sanctions on the Islamic republic, confiscated its cargo. 

The Trump administration reimposed wide-ranging sanctions on Iran’s economy and energy industry after exiting the 2015 nuclear deal as part of a broader strategy to destabilize and weaken the country’s leadership.

The Prudent Warrior has since been taken to the Iranian port of Bandar Abbas with all crew and cargo still on board, George Vakirtzis, managing director of the vessel’s owner Polembros Shipping Ltd., said by phone.

Previous Incidents

The Persian Gulf nation held a British tanker for more than two months in 2019 after an Iranian oil tanker was blocked in Gibraltar. Both vessels were eventually released. Other British, Saudi and UAE-owned tankers have been accosted in and around Hormuz in the past several years, while Iranian vessels have been hit in the Red Sea.

“We knew the Iranians would retaliate, we saw that two years ago with the Stena vessel,” Vakirtzis said. “A lot of Greek vessels go up and down the Gulf right in front of their door.” There was little the captain of a laden oil tanker could do to avoid a helicopter-borne boarding party like the one that captured the Prudent Warrior, Vakirtzis added. 

The IRGC said it was responsible for the seizures and warned other Greek vessels in the area, according to the semi-official Tasnim news agency. The IRGC indicated that 17 other Greek vessels in the Gulf could also be seized, said Tasnim, which is closely aligned to the Iranian military organization.

–With assistance from Serene Cheong, Prejula Prem, Verity Ratcliffe, Golnar Motevalli, Paul Tugwell, Sotiris Nikas and Arsalan Shahla.

© 2022 Bloomberg L.P.

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