Tanker believed to hold sanctioned Iran oil starts offloading near Texas despite Tehran’s threats

The USS Bataan at the Strait of Hormuz, in the mouth of the Persian Gulf. Photo / AP

An American-owned oil tanker long suspected of carrying sanctioned Iranian crude oil offloaded its cargo near Texas on Sunday, tracking data showed, even as Tehran has threatened to target shipping in the Persian Gulf over it.

Ship-tracking data analysed by Associated Press showed the Marshall Islands-flagged Suez Rajan began the hours-long ship-to-ship transfer of its oil to another tanker, the MR Euphrates, near Galveston, some 70km southeast of Houston.

The fate of the cargo aboard the Suez Rajan has become mired in the wider tensions between the US and the Islamic Republic, even as Tehran and Washington work towards a trade of billions of dollars in frozen Iranian assets in South Korea for the release of five Iranian-Americans held in Tehran. Iran has been trying to evade sanctions and continue selling its oil abroad, while the US and its allies have been seizing cargoes since 2019 after the country’s nuclear deal allowing the trade collapsed.

Already, Iran’s paramilitary Revolutionary Guard has warned that those involved in offloading the Suez Rajan’s cargo “should expect to be struck back”. The US Navy has increased its presence steadily in recent weeks in the Middle East, sending the troop-and-aircraft-carrying USS Bataan through the Strait of Hormuz in recent days and considering putting armed personnel on commercial ships travelling through the strait to stop Iran from seizing more ships.

US officials and the owners of the Suez Rajan, the Los Angeles-based private equity firm Oaktree Capital Management, did not respond to requests for comment.

The saga over the Suez Rajan began in February last year, when the group United Against Nuclear Iran said it suspected the tanker carried oil from Iran’s Khargh Island, its main oil distribution terminal in the Persian Gulf.

For months, the ship sat in the South China Sea off the northeast coast of Singapore before suddenly sailing for the Gulf of Mexico without explanation. Analysts believe the vessel’s cargo has probably been seized by American officials, though there still were no public court documents by early Sunday involving the Suez Rajan.

In the meantime, Iran has seized two tankers near the Strait of Hormuz, including one with cargo for US oil major Chevron Corp. In July, the top commander of the Revolutionary Guard’s naval arm threatened further action against anyone offloading the Suez Rajan, with state media linking the recent seizures to the cargo’s fate.

“We hereby declare that we would hold any oil company that sought to unload our crude from the vessel responsible and we also hold America responsible,” Rear Admiral Alireza Tangsiri said at the time. “The era of hit-and-run is over, and if they hit, they should expect to be struck back.”

Iran’s mission to the United Nations did not respond to a request for comment over the offloading of the Suez Rajan. The state-run IRNA news agency acknowledged this AP story, but did not elaborate. Western-backed naval organisations in the Persian Gulf in recent days also warned of an increased risk of ship seizures from Iran around the Strait of Hormuz.

Iran’s 2015 nuclear deal with world powers allowed it to regain the ability to sell oil openly on the international market. But in 2018, then-President Donald Trump unilaterally withdrew from the accord and reimposed American sanctions. That slammed the door on much of Iran’s lucrative crude oil trade, a major engine for its economy and its government. It also began a cat-and-mouse hunt for Iranian oil cargo — as well as series of escalating attacks attributed to Iran since 2019.

The delay in offloading the Suez Rajan’s cargo had become a political issue as well for the Biden administration because the ship had sat for months in the Gulf of Mexico, possibly due to companies being worried about the threat from Iran.

In a letter dated Wednesday, a group of Democratic and Republican US senators asked the White House for an update on what was happening with the ship’s cargo, estimated to be worth some US$56 million ($94m). They said the money could go towards the US Victims of State Sponsored Terrorism Fund, which compensates those affected by the September 11 attacks, the 1979 Iran hostage crisis and other militant assaults.

“We owe it to these American families to enforce our sanctions,” the letter read.

Republican senator Joni Ernst, of Iowa, one of the letter’s co-signers, said “no foreign adversary should question America’s strength”.

“To ensure this never happens again, the Biden administration must enforce our existing sanctions, stop greenlighting the [Guard’s] terrorism and hostage ‘diplomacy’ and end this posture of appeasement to a nation that chants ‘death to America’,” she said.

The US Treasury has said Iran’s oil smuggling revenue supports the Quds Force, the expeditionary unit of the Revolutionary Guard that operates across the Middle East.

Claire Jungman, the chief of staff at United Against Nuclear Iran, praised the transfer finally happening.

“By depriving the [Guard] of crucial resources, we strike a blow against terrorism that targets not only American citizens but also our global allies and partners,” Jungman said.

On Sunday, Iranian state media released a video dated Thursday that showed the USS Bataan with small Guard fast boats trailing it as it travelled through the Strait of Hormuz, the narrow mouth of the Persian Gulf through which 20 per cent of the world’s oil passes. One portion appeared to have been taken from a drone above the Bataan, while another claimed the Guard hailed the Bataan over the radio and threatened to “open fire” on an American helicopter if it entered Iranian airspace.

Commander Rick Chernitzer, a spokesman for the US Navy’s Bahrain-based 5th Fleet, acknowledged the Bataan had transited through the strait in recent days. A photograph earlier released by the navy showed F-35 fighter jets providing cover for the Bataan and the USS Carter Hall, a landing ship accompanying it.

“The US Navy will continue to fly and sail where international law allows,” Chernitzer said.