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alleged illegal transfer of oil between ships

A photo released by the Indonesia Coast Guard showing the alleged illegal transfer of oil from the Iranian-flagged MT Horse to Panamanian-flagged MT Freya. Image courtesy Indonesia Coast Guard

Stuck at Sea: Iranian Oil Is Stranded Off Texas Coast

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July 25, 2023

By Arathy Somasekhar and Jonathan Saul (Reuters) – A cargo of sanctioned Iranian crude oil that was confiscated by the U.S. has sat off the Texas coast for eight weeks, unable to unload because commercial agents fear any vessel that takes it will be shunned by customers, people familiar with the matter said.

Suez Rajan, a Marshall Islands-flagged tanker, has been anchored off Galveston, about 50 miles (80 km) outside of Houston, since May 30, with ship agents refusing to accept it. The Suezmax requires a lightering agent to transfer the crude to smaller ships, as its size and weight restrict it from directly entering the port. 

Shipping companies are worried that lightering the Iranian crude onto their vessels would lead other oil buyers to shun their ships on future voyages, one of those people said. 

“Our legal team said ‘absolutely not,'” he added, saying the ship has yet to find any willing party to transfer the oil.

Maritime firms have tightened checks on charter vessels to avoid using tankers that might have transported crude from sanctioned countries. Typically, firms check the last three or four vessel contracts and avoid those that might affect future voyages. 

A Western industry expert said the inability to discharge the cargo is partly out of fear of repercussions from Iran. The Middle East oil exporter has threatened retaliation against any oil company unloading Iranian oil from the seized tanker. 

Iran’s oil ministry could not immediately be reached for comment. 

The vessel had the necessary U.S. approvals and paperwork to unload, the Western industry person said. 

Court documents authorizing the seizure are sealed until the cargo is sold, a U.S. government official said on condition of anonymity because the matter is sensitive. 

Spokespeople for the U.S. Coast Guard, the U.S. Customs and Border Protection agency and the Department of Justice did not immediately respond to requests for comment.

(Reporting by Arathy Somasekhar in Houston, Jonathan Saul in London, Timothy Gardner in Washington and Parisa Hafezi in DubaiEditing by Matthew Lewis)

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