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Smuggled Iranian fuel and secret nighttime transfers: Seafarers recount how it’s done

A billboard depicting Iranian Revolutionary Guards navy units rushing toward an Iranian tanker held captive by a giant octopus in the colors of the American flag is displayed in Tehran on Nov. 5, 2021. (AFP/Getty Images)

DUBAI — The secret transfers usually take place at night to evade detection by regional coast guards. The ships anchor in the Persian Gulf just outside the territorial limits of the United Arab Emirates, and then, individually, small boats carrying smuggled Iranian diesel shift their loads to the waiting vessels, according to seafarers who have witnessed the trade.

“It is a big chain, with fishing boats sailing up to give diesel to a waiting tanker. It takes four to five days because boats come one by one,” said a 27-year-old Indian seafarer, who spoke on the condition of anonymity for fear of reprisals. He said he had been employed by a Dubai-based shipping company that smuggled Iranian fuel to Somalia.

His description of these illicit operations, which accelerated when the United States reimposed sanctions on Iranian oil exports after President Donald Trump withdrew from the Iranian nuclear deal in 2018, is one of five eyewitness accounts provided by Indian nationals who say they worked on vessels involved in the clandestine commerce. While smuggling of Iranian petroleum products has been documented previously and drawn a U.S. rebuke, these seafarers offered a rare inside look at how these activities are carried out.

The tankers always anchor in the international waters that separate Iran and the UAE, recounted a 28-year-old Indian seafarer, who said he worked for two companies involved in smuggling Iranian diesel between 2016 and 2020.

“UAE territorial waters end after 12 miles, so Iranian ships come as close as 14 to 20 miles to the UAE,” he said. “They switch off their AIS [automatic identification system] so that they can’t be tracked. If they see the UAE coast guard, they stop the operation and run away.”

In addition to the nighttime transfers at sea, Iranian diesel bound for international markets is exported on tankers setting sail from Iran with the origin of the shipment forged to make it look as though it came from Iraq or the UAE, according to a third seafarer and three experts in security and energy affairs.

Because of the profit margins, this trade was highly lucrative even before the United States pulled out of the nuclear deal. Iran has some of the world’s cheapest fuel prices thanks to very low production costs, heavy government subsidies and a weak currency. But the reimposed economic sanctions have given this business a further boost as smugglers seek to evade restrictions on Iranian oil exports. Those sanctions are now a focus of discussions in Vienna, where Iran and world powers have resumed negotiations aimed at reviving the nuclear accord.

“The transport of sanctioned Iranian [petroleum] products happens on a weekly basis,” said Cormac Mc Garry, associate director of Control Risks, a consultancy. “There are financial drivers and the demand, so Iran will find a way around sanctions. And its policy is to keep that an absolute secret. They don’t reveal how they do it.”

The smuggling involves elements of the Iranian state, notably the Islamic Revolutionary Guard Corps (IRGC), and private shipping companies based in Persian Gulf countries, according to analysts specializing in the energy industry and regional security. At times, they said, the IRGC seeks to interdict those who try to secure a piece of its action without the group’s permission.

The U.S. Treasury Department has accused the IRGC of making money from the smuggling of oil and petroleum products.

Iranian officials have previously said they oppose diesel smuggling. The Iranian Foreign Ministry did not reply to a request for comment.

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“The maritime component of the IRGC has a very rigid control over the maritime border as well as the port facilities. A lot of people are being paid off. The IRGC is a highly corrupt institution,” said Andreas Krieg, a senior lecturer at the School of Security Studies at King’s College London. “If we look at the quantities that are being smuggled each year from Iran, we’re talking millions of barrels.”

A 'scary' shipboard raid

Deepak Verma’s hands were tied at gunpoint. He was ordered to stay still. Six armed men in uniforms had rushed onto his ship, the MV Asphalt Princess, he recalled, and they identified themselves as members of the Iranian military.

Their leader warned, ‘ “If anybody speaks or tries to do something, we will kill him.’ We sat on the floor with our hands behind our backs,” said Verma, 32, who held the position of second engineer on the ship. “He asked if diesel was onboard. But nobody said a word.”

A few hours earlier on that day in August, a small boat from Iran had sailed up to the Asphalt Princess and transferred diesel into its storage tank, Verma said, so the fuel could be sold on to other vessels for shipment abroad.

The assailants ordered the crew to sail the ship to Iran, but the crew — about a dozen men from India and Sri Lanka — stalled by claiming the engine was having problems and could catch fire. Then, in the early hours of the following morning, the attackers left suddenly for reasons that remain unclear.

“That time was so scary,” Verma said.

United Kingdom Maritime Trade Operations (UKMTO) issued a warning notice in the hours after the attack that the incident was a potential hijacking.

Suspicion quickly fell on Iranian forces, and specifically the IRGC. According to Krieg, the IRGC detains or hijacks vessels when shipping companies seek to smuggle petroleum products without its permission.

“When you have the IRGC seizing ships, this indicates they are without the approval from the higher echelons, who also want to make money out of it,” Krieg added. “It’s also good in terms of international reputation, because there are allegations that the Iranians are actively helping smugglers to circumvent the sanctions.”

Three seafarers other than Verma said that Prime Tankers, the Dubai-based company that owns the Asphalt Princess, is involved in shipping Iranian diesel on at least two other ships as well. In 2019, the IRGC detained the MT Riah, another ship in Prime Tankers’ fleet, on accusations of smuggling.

Cargo documents for the Asphalt Princess obtained by The Washington Post show that during 2021 the ship has also transported refined oil products, bitumen and rubber process oil — which are covered by U.S. sanctions — from Iran to Oman and China.

Prime Tankers did not respond to a request for comment.

Obfuscation and bribes

Vikash Thakur, an Indian seafarer with a decade of experience, said it can be dangerous to disclose what he’s seen in the Persian Gulf. “Seafarers don’t want to talk about these things. They are afraid,” he said.

But it’s hard to miss this shadow commerce. The sea lanes between the Strait of Hormuz and ports in Dubai and Saudi Arabia are busy with small boats carrying contraband diesel for transfer to larger vessels, Thakur said. At times, he said, the diesel is temporarily stored in the Emirati port of Sharjah, where documents are forged to make it seem as if the fuel came from Iraq. (The Sharjah Ports Authority did not respond to a request for comment.)

“It’s an open secret that illicit trade goes on, but nobody actually names it,” said Andy Bowman, regional director for the Middle East and South Asia at the Mission to Seafarers charity. “The waters from Ajman [in the UAE] to Iran, particularly at night, are busy with ships moving at unusual times and not coming into port, but discharging or connecting with other ships while they’re anchored.”

From there, cargoes of refined products, such as diesel, are transported onward to countries such as Yemen and Somalia, said Samir Madani, co-founder of TankerTrackers.com, a consultancy that tracks shipments of crude oil.

“The classic way to obfuscate is to switch off your [AIS] transponder, then you go dark for a week, then you come back online, and everyone is wondering where you picked your cargo up from,” Madani said.

Mc Garry, of Control Risks, said turning off the AIS violates international maritime codes and is a red flag for illicit activity. “Because of these gaps in AIS, it is difficult to spot where those ships have met up. Then we start losing the track of where that cargo goes to because it gets transferred to another ship,” he said.

This lack of transparency poses a risk to potential purchasers, Mc Garry said, because they could be involved in the trade of diesel and crude oil that looks “perfectly legitimate” but falls under U.S. sanctions, leaving these businesses exposed to potential fines.

For the seafarers, this can be a perilous business. Both the IRGC and pirates pose a menace, and ships often carry large sums of money in case either one needs to be paid off. Indrajeet Rathod, 30, who worked on a ship smuggling diesel to Yemen from 2017 through 2020, said his vessel carried about $10,000 for bribes. Thakur said the captain of his ship usually had $50,000.

“The only way to get the Iranians to leave the ship is for the captain to give them cash,” Thakur said. He added, “Cash can save the seafarers from torture. Because they [the IRGC] never behave like humans. They start beating, always.”

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