The New York Times – China and other countries are receiving oil shipments from a larger number of Iranian tankers than was previously known, defying sanctions imposed by the United States to choke off Tehran’s main source of income, an investigation by The New York Times has found.
The Times examined the movements of more than 70 Iranian tankers since May 2, when the American sanctions took full effect.
Twelve of the tankers loaded oil after May 2 and delivered it to China or the Eastern Mediterranean, where the buyers may have included Syria or Turkey. Only some of those 12 tankers were previously known to have recently delivered Iranian oil, and an analyst said the scale of the shipments documented by The Times investigation is greater than what had been publicly known.
The continued flow of oil underscores the difficulty the Trump administration has had in using sanctions to bring Iranian oil exports to zero after breaking with allies and partners on Iran policy. The Obama administration had worked with China, Russia and three European allies on the 2015 agreement intended to restrict Iran’s ability to pursue a nuclear program. President Trump’s decision to withdraw from the deal and to impose sanctions was opposed by those countries.
“You can’t make these kinds of threats if you can’t operationalize it,” said Richard Nephew, a scholar at Columbia University and a former White House and State Department official who helped enforce Iran sanctions during the Obama administration. President Barack Obama did not have a goal of bringing Iran’s oil exports to zero while pressuring Tehran to negotiate.
“It adds up to a decision that makes them look weak and feckless,” he added. “That shows there are limitations to U.S. power. China and other places are prepared to say, ‘No, we’re not going to follow the U.S. lead.’”
The Times reviewed data from MarineTraffic and Refinitiv, two ship-tracking services, as well as satellite imagery from Planet Labs and analysis from shipping and energy experts.
“U.S. sanctions have not stopped Iran from moving oil to the Mediterranean and Asia,” said Noam Raydan, an analyst at ClipperData, which tracks global crude shipments.
Iranian Tankers Are Regularly Docking in China
Both satellite imagery and position data show Iranian tankers sitting in Chinese ports for several hours or days.
It is not illegal under international law to buy and haul Iranian oil or related products. The Trump administration’s oil sanctions, which mainly went into effect last November after the United States pulled out of the Iran nuclear agreement, are unilateral. The administration granted eight governments permission to continue buying Iranian oil despite the sanctions, but ended those exceptions on May 2.
Foreign companies that ignore the sanctions and do business with American companies or banks risk being punished by the United States.
American officials have said that sanctions are aimed at cutting off money to the Iranian government to force leaders there to make political change, transform their foreign policy and offer more concessions on the country’s nuclear and missile programs.
While Iran continues to export oil, the sanctions have had a substantial impact. In April 2018, before Mr. Trump withdrew from the nuclear deal, Iran exported 2.5 million barrels of oil per day. One year later, that figure was at one million. And in June, after the end of the exceptions or waivers, ships in Iranian ports loaded about 500,000 barrels per day, according to Reid I’Anson, an energy economist at Kpler, a company tracking seaborne commodities.
Since the sanctions came into full effect on May 2, low-level hostilities between Iran and the United States in the Persian Gulf have increased, despite attempts by European nations to ramp down tensions and get Iran to comply with the nuclear deal, which it had been doing until it breached limits on nuclear fuel last month.
The State Department said any new purchase of Iranian oil after May 2 would be subject to sanctions. “Our firm policy is to completely zero out purchases of Iranian oil,” it said.
Japan and South Korea, fearful of secondary sanctions imposed by Washington if they do business with Iran, have complied with the American sanctions. Turkish officials said in late May they are halting imports of Iranian oil but do not agree with the American sanctions.
In July, the British marines and port authorities in Gibraltar seized a supertanker that they said was carrying crude oil from Iran to Syria. Though the Europeans do not endorse the American sanctions on Iran, the shipment violated European Union sanctions against Syria.
The Trump administration is starting to intensify sanctions enforcement to try to end the exports to China, which continues to be the largest buyer of Iranian oil. On July 22, Secretary of State Mike Pompeo announced sanctions against Zhuhai Zhenrong, a Chinese state-owned enterprise, and its top executive, Li Youmin, for “violating U.S. restrictions on Iran’s oil sector.”
“We have a pretty good bead on where these ships are moving around,” Mr. Pompeo told Bloomberg TV on July 25. “Wherever we find violations, we will do our level best to enforce them completely and thoroughly.”
But that does not satisfy some Republican members of Congress who are national security hawks.
“While I’m glad the administration sanctioned an initial round of Chinese actors, it must step up strong enforcement to deter Chinese and other foreign actors from violating U.S. sanctions against Iran,” said Senator Marco Rubio, Republican of Florida. “The Iranian regime has blatantly shipped millions of barrels of oil to China.”
To really tighten the screws on China, the Trump administration would need to punish the People’s Bank of China or other Chinese banks that engage in transactions with the Central Bank of Iran, Mr. Nephew said. The United States could also penalize the energy giant Sinopec, which, like Zhuhai Zhenrong, also imports oil from Iran. But sanctioning the banks or Sinopec would have far-reaching consequences for global trade and deepen the divide between Washington and Beijing.
The two nations are already embroiled in a bitter trade war and at odds over global security issues, and Mr. Trump is eager to reach a trade deal with President Xi Jinping of China.
A Chinese Foreign Ministry spokesman, Geng Shuang, said on July 19 that the Trump administration’s “maximum pressure” campaign against Tehran was the “root cause of the current tensions” involving Iran and that Washington should “correct its wrongdoing.”
Before the end of the sanctions exceptions on May 2, China had been importing 500,000 barrels of Iranian oil per day. In the past month, China’s imports have dropped to about 360,000 barrels per day, according to Kpler.