Greek Tanker Company Fined $2.4M by U.S. for Handling Iranian Oil

Greek tanker operator Empire Navigation agreed in April 2023 to plead guilty in U.S. court to charges of transporting illicit Iranian oil in the highly publicized case of the Suez Rajan, a tanker that was brought from the Far East to Houston so that the U.S. could seize and unload its cargo. Newly released court documents obtained by the Associated Press and The New York Times illustrate the depths Iran is taking to hide its sanctioned oil shipments confirming what watchdog groups have long contended.

The court documents confirm the guilty plea was entered on April 19 and the company was sentenced that same day. The U.S. government however had moved to have the documents remain sealed telling the court that the action was “likely to cause security risks to the defendant, the government, as well as the vessel and its crew.”

According to documents seen by the Associated Press, Empire Navigation will pay a fine of $2.4 million after it pleaded guilty to one count of violating the sanctions imposed by the U.S. on the shipment and sale of Iranian oil. In addition, the Greek shipping company agreed to assist the U.S. in the transfer and offloading of the crude oil cargo aboard its ship in Texas. They will also serve three years probation.

As part of the case, a statement of the facts was entered into the record with the company agreeing the information was “true and accurate,” and not to dispute the Statement of the Offense. Lawyers for the National Security Division of the U.S. Department of Justice write in the document, “the following facts establish beyond a reasonable doubt,” the circumstances and violations of the sanctions. 

They trace the illicit oil shipment starting with it being loaded in January 2022 on the Virgo (305,700 dwt) tanker registered in Panama. The Equasis database reports the ship had been managed by another Greek shipping company, Dynacom Tankers, but went through a series of companies and is now managed by a company in India. The tanker spoofed its position with a secondary AIS transponder confirmed by images from the European Space Agency. It loaded the crude oil cargo and departed fully laden from an Iranian terminal for the Far East.

Empire Navigation received more than $1.2 million in February 2022 for the charter of the Suez Rajan (158,000 dwt), a tanker registered in the Marshall Islands. The vessel, which was empty, was instructed to make a ship-to-ship transfer receiving a small amount of crude from one tanker, the CS Brillance (300,000 dwt tanker registered in Panama). A few days later, the Virgo arrived and made a second transfer to the Suez Rajan, although the captain was instructed to show a single transfer from the first vessel in the logs. In the court papers, the U.S. contends the captain and chief officer working for Empire falsified the records of the oil transfer in the logs of the Suez Rajan.

The case was complicated by the fact that the records show that the Suez Rajan was owned by a U.S. investment company, Oaktree Capital Management. They, however, contend they sold the tanker to Empire Navigation.

The tanker itself remains at anchor off the Texas coast. The lightering operation began last month after a long delay believed to be related to threats by Iran to retaliate against any company involved in the transfer. Iran has already recently seized tankers and harassed other vessels in the Persian Gulf region and the Strait of Hormuz. U.S. and UK officials have continued to warn ships of the danger and increased their patrols in the region.

The watchdog group United Against Nuclear Iran (UANI) regularly highlights the movements of tankers illustrating the Iranian regime's efforts to avoid the sanctions. They called attention to the Suez Rajan. The group has identified approximately 300 tankers it believes are involved in the efforts to transport sanctioned Iranian oil products. The group highlights the use of the so-called shadow fleet, efforts at regularly disguising or turning off AIS signals, and ship-to-ship transfers mostly in Asia before sending the oil to China.

Iran admits that it is increasing its shipments of crude oil saying that it has reached the levels prior to the Trump administration. Commodity intelligence firm Kpler estimates Iran is exporting 1 to 1.5 million barrels of oil a day while Tehran now claims to be exporting nearly 2 million barrels a day.

The U.S. has increased its efforts at targeting tanker companies receiving the shipments and has gone to court on other occasions to seize the oil. While they have succeeded in several cases, last summer the efforts to seize a cargo in Greece failed when Greek courts sided with Iran and ordered the crude which had already been partially offloaded returned to the tanker which Iran identified as part of its national fleet. Iran later released two Greek tankers that it had seized in the Middle East as retaliation.