U.S. Pressure Campaign Leaves Iranian Tankers Stranded in Asian Waters

Dow Jones
1 hour ago

COLOMBO, Sri Lanka-Some 15 miles off the southwest coast of Sri Lanka, around 20 empty Iranian oil tankers are stranded, drifting with their engines idled as food, fuel and fresh water run short.

They are the most visible consequence of the new pressure campaign by the U.S. to bring Iran to heel. Dozens of Iranian or Iranian-linked tankers that had participated in the shadowy trade of getting sanctioned oil to China have been stuck in the waters near Asian countries like Sri Lanka and Malaysia since July, when the U.S. reimposed its blockade of the Strait of Hormuz.

Then, in recent weeks, U.S. officials have pressured Sri Lanka into blocking local ships from provisioning the tankers and their crews, according to Sri Lankan government documents and companies that provide provisions to those ships.

The Trump administration is pursuing a hardball strategy aimed at forcing Iran into making concessions in the monthslong conflict. In recent days, the U.S.-which slapped Iran with many new sanctions this summer-has warned Iran's trading partners to ditch the country.

Before the war, ships carrying Iranian oil would ferry the crude to international waters off Malaysia, where they transferred it to other tankers that would then transport it to Chinese refineries, an elaborate operation designed to evade U.S. sanctions on Iranian oil.

The tankers would then sail back to Iran, pick up more oil, and do it all again. Some tankers are Iranian. Others sail under other flags but have been sanctioned by the U.S. because of their involvement in such subterfuge.

Now, the blockade has dealt this trade a blow. Iranian ships can't return home. The recent U.S. sanctions blitz means that some Asian ports that once serviced them now refuse them out of fear of U.S. sanctions, leaving the tankers adrift at sea. The squeeze has also affected containerships bringing goods such as corn and industrial materials to Iran.

On a recent journey to international waters off the coast of Malaysia chartered by the U.S. advocacy group United Against Nuclear Iran, empty, rusting Iranian-linked ships floated high in the water. Many have been anchored there since July.

"When they finish their jobs they park here," said Charlie Brown, a researcher with UANI. "They don't want to go back because of the blockade."

One was the Elva, a sanctioned tanker that had loaded up with oil on Iran's Kharg Island and crossed the Strait of Hormuz in June, according to financial data provider LSEG. It has been lingering off Malaysia since discharging the crude to another vessel in a ship-to-ship transfer in August. Sailors on the Elva appeared bored. One started dancing when he saw a passing boat, waving and shaking his hips.

Oil analysts expect that the last of the Iranian oil still waiting to be transferred to buyers will run out in the coming weeks, with payments to Iran to conclude by year's end. "All revenues drop to zero for Iran by December," said Homayoun Falakshahi, head of Crude Oil Analysis at Kpler.

Over the last two months, many of the tankers have left the area off Malaysia for the Indian Ocean and the coast of Sri Lanka, which is closer to Iran and has a history of providing fuel, fresh provisions and repair crews to Iranian ships.

But in August, the U.S. Embassy in the Sri Lankan capital of Colombo informed the government that it was tracking 19 Iranian tankers off the country's western coast and urged officials to tell local port service providers to deny them support or risk U.S. secondary sanctions, according to Sri Lankan government documents seen by The Wall Street Journal.

Around this time, many of the Iranian vessels pulled away from Sri Lanka's territorial waters, with many drifting deeper into the Indian Ocean, their engines idled to conserve fuel, according to ship-tracking data and Sri Lankan maritime businesses.

When, in early September, two Iranian-flagged container vessels anchored in the port limits of Colombo, Sri Lanka's port authority stated in a letter seen by the Journal that it wasn't "prudent to provide services to Iranian-flagged" vessels because of the risk of U.S. sanctions.

In mid-September, the U.S. Embassy in Colombo conducted a three-day training session with more than 40 Sri Lankan officials, laying out the risk of U.S. penalties if shipping agents, fuel providers and other service companies "knowingly or unknowingly" support sanctioned vessels.

"Sri Lanka sits at a strategic crossroads for global commerce, bringing both tremendous opportunity and the need for vigilance," U.S. Ambassador to Sri Lanka Eric Meyer said in a September statement. The U.S. was taking decisive action to stamp out sanctions evasion by "sharing U.S. expertise with our Sri Lankan partners."

The State Department said that the U.S. will "continue to disrupt, expose, and dismantle" Iran's illicit oil trade, and called on the international community to hold Iran accountable. The State Department didn't reply to a separate request for comment on the conditions facing the crews of the Iran-linked vessels.

Dubai-based shipping agents for the tankers have pleaded with businesses in Sri Lanka to send out fresh food and fuel. But representatives of Sri Lankan shipping companies say it has become difficult to secure approval from port authorities to provide any services for Iranian vessels.

The owner of a Sri Lankan shipping repair company that dispatched a team to an Iranian ship just before the onset of the new restrictions found that provisions on the tanker were dwindling. While repair crews are normally fed on board and can wash there, the tanker's crew told them to bring their own food and warned them that they couldn't wash because the vessel needed to conserve fresh water, according to the company official.

Another Sri Lankan shipper said he has received desperate calls for food and provisions from agents of the tankers, but Sri Lankan authorities weren't approving supply visits to Iranian ships.

Thushara Rodrigo, a spokesman for Sri Lanka's foreign ministry, acknowledged the risk that sanctioned ships might run out of food, fuel and water. He said that if ships require emergency provisions, private companies could be reluctant to supply the tankers and risk sanctions.

Other Iran-linked vessels have ventured to waters near India and China. Some of those that have remained in the familiar waters near Malaysia have moved north from an area known as the Eastern Outer Port Limits, where ship-to-ship transfers of Iranian oil have normally taken place. UANI analysts say this could be the result of stepped-up Malaysian enforcement activity. A Malaysian coast-guard official didn't respond to a request for comment.

On a recent trip, a pair of small local sampan vessels pulled up to the Parnia, an Iranian cargo ship idling off the coast of southeastern Malaysia. The Parnia had been stranded there since July when it returned from China stacked with containers, according to ship-tracking data. The sailors onboard the sampans are known to go from ship to ship, selling basic supplies like cigarettes and beer.

Iranian ships were guarded when they were contacted by radio. In response to an inquiry about whether there was enough food onboard, one ship responded in terse Farsi: "Do not worry about our food."

Advocates of a tougher policy against Iran say that targeting those that provision the ships could raise the cost-and risk-of owning and servicing vessels that carry Iranian oil and other goods, making it difficult to carry out Iran's shadow oil trade. In August, the U.S. sanctioned a network of companies that provided fuel to Iranian ships.

"A vessel that is sitting and not carrying oil is just a hole in the budget," said Mark Wallace, UANI's CEO, who has called for tougher U.S. sanctions against Malaysian groups that supply the ships.

 

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