British forces seize oil tanker for violating Syria sanctions
DUBAI and LONDON (Bloomberg) -- British special forces seized a supertanker off Gibraltar suspected of carrying Iranian oil to Syria in violation of European and U.S. sanctions against the war-torn country.
Grace 1, which can hold 2 MMbbl of crude, is now anchored near Gibraltar, a British overseas territory in southern Spain that controls the strait between the Mediterranean Sea and the Atlantic Ocean. The vessel is registered in Panama.
The seizure, announced by Gibraltar’s government, could inflame tensions between Iran and the European Union just as the UK, France and Germany try to keep the Islamic Republic from walking away from the nuclear deal. The U.S. quit the pact a year ago, prompting Iran to make good on an earlier warning that it would exceed the limits on its stockpile of enriched uranium.
While Syrians will feel the immediate impact of halting the crucial oil shipment to the country, the arrested vessel shows the difficulty Iran faces in finding outlets for its crude as President Donald Trump’s administration ramps up sanctions.
“We have detained the vessel and its cargo,” said Fabian Picardo, Gibraltar’s chief minister. “This action arose from information giving the Gibraltar government reasonable grounds to believe that the vessel, Grace 1, was acting in breach of European Union sanctions against Syria.”
Gibraltar didn’t say where the crude came from, but shipping tracking data compiled by Bloomberg suggest the vessel loaded at Iran’s Kharg Island oil terminal in mid-April. After anchoring off the United Arab Emirates for several weeks, the ship began a journey around the southern tip of Africa, passing Cape Town in early June, rather than taking the more direct route through the Suez Canal.
That route from Iran to Syria is about 23,300 km (14,500 mi), compared with just 6,600 km via the Red Sea and Suez Canal. A ship the size of the Grace 1, known as a Very Large Crude Carrier, or VLCC, can’t pass through the canal fully loaded. The shorter route would require it to discharge half its cargo, load it on to a smaller ship or send the oil through the Sumed Pipeline, and pick it up again in the Mediterranean.
Iran can’t pump oil through the pipeline, which spans Egypt from the Red Sea to the Mediterranean, because the link is owned by companies from Egypt, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar. The pipeline’s owners have not permitted the transit of Iranian crude since August 2012.
Iran has regularly supplied Syria with crude since the country descended into civil war in 2011. Iran backs the government headed by President Bashar Al-Assad, which has been sanctioned for most of this decade due to its bloody crackdown on the country’s civilians.
Syria receives Iranian crude despite the embargo. It imported at least 32,000 bpd in 2018 and 66,000 in 2017, according to tanker tracking data compiled by Bloomberg. It has imported similar volumes so far this year.
Gibraltar said Grace 1 was destined for the Baniyas refinery, which is owned by the Syrian government and is subject to both U.S. and EU sanctions. Three of the facility’s underwater oil pipelines were allegedly sabotaged with mines in June, according to Syrian TV, potentially complicating the unloading of cargoes there.
“We welcome this firm action to enforce EU sanctions against the Syrian regime,” Prime Minister Theresa May’s spokesman James Slack told reporters in London after the tanker seizure. “This sends a clear message that violation of the sanctions is unacceptable.”