UAE sheikh lays claim to oil cargo that US seized alleging Iran's

The case underscores the difficulty the US faces as it tries to bar Iran from generating income from energy sales and pressure it into re-starting nuclear talks.
A general view of Abadan oil refinery in southwest Iran, is pictured from Iraqi side of Shatt al-Arab in Al-Faw south of Basra.(REUTERS / File Photo)
A general view of Abadan oil refinery in southwest Iran, is pictured from Iraqi side of Shatt al-Arab in Al-Faw south of Basra.(REUTERS / File Photo)
Published on Mar 14, 2021 07:35 PM IST
Copy Link
Bloomberg |

The US attempt to prevent Iran exporting oil suffered a blow after a United Arab Emirates sheikh laid claim to a cargo that Washington seized and alleged is from the Islamic Republic.

A company controlled by the Emirate of Fujairah’s ruler told a US court that the roughly 2 million barrels of crude was originally from Iraq.

Fujairah International Oil & Gas Corp., wholly owned by Sheikh Hamad bin Mohammed Al Sharqi, said it’s an intermediary seller of the oil, according to a claim filed in a federal court in the District of Columbia.

The case underscores the difficulty the US faces as it tries to bar Iran from generating income from energy sales and pressure it into re-starting nuclear talks.

While shipments of Iranian oil have slumped due to threat of US penalties, they have picked in recent months, though their origin is often disguised. The main buyers are refiners in China.

Washington alleges that Iran’s Islamic Revolutionary Guard Corps and the IRGC-Quds Force -- both classified as terrorist organizations by the US -- covertly shipped the oil abroad, relying on ship-to-ship transfers and falsified documents. Iran said the cargo belonged to the “private sector” and that its seizure was an “act of piracy.”

“I’m sure that Iranian oil is continuing to flow,” said Iman Nasseri, managing director for the Middle East at consulting firm FGE. “Forging documents like bills of lading and others needed for trades is not that big a problem.”

US President Joe Biden has proposed that the two nations return to a 2015 international agreement under which Iran limited its nuclear activities in exchange for sanctions relief. His predecessor, Donald Trump, pulled the US out of the accord in mid-2018 and tightened sanctions. Tehran says those must end before a new round of talks can begin.

Tensions in the Middle East have also mounted recently due to a spate of attacks on ships and energy facilities. Saudi Arabia’s Ras Tanura oil-export terminal -- the world’s largest -- was attacked by drones and missiles earlier this month. Yemen’s Houthi rebels, who are supported by Iran, claimed the assault. Several tankers were targeted with mines in the Red Sea last year, while an Israeli-owned cargo vessel was struck by an explosion in the Persian Gulf in late February.

FIOGC said that in June it bought the crude from an undisclosed Iraqi supplier, which presented bills of lading from Iraq’s state oil marketer SOMO as proof of origin. FIOGC then stored the oil on a ship at the port of Fujairah, a major energy-trading hub on the UAE’s Gulf of Oman coast.

Calls placed to SOMO on Sunday weren’t answered, while FIOGC didn’t immediately respond to a request for comment.

​In October, FIOGC sold the oil to an unidentified Chinese buyer. Under the agreement, FIOGC was responsible for delivering the crude and chartered the supertanker Achilleas for the journey to China.

The U.S. government moved to seize the cargo late last year after the Achilleas’ Greek owner, Capital Ship Management Corp., alerted authorities to the possibility it had unknowingly taken on Iranian crude, after believing it came from Iraq.

Houston Discharge

The Achilleas rerouted to the US and the crude was discharged in Houston this month. FIOGC claims it retains a financial stake in the cargo.

The US Department of Justice filed a legal case in early February to allow it to seize the oil.

FIOGC was established last year to trade petroleum products. The use of floating storage facilities was “particularly important in 2020” because the coronavirus pandemic hammered demand for oil and traders ran out of space at onshore tanks, according to FIOGC’s court filing.

Sheikh Hamad is also a member of the UAE’s Supreme Council, the country’s executive arm. The UAE is one of the US’s closest allies in the region. It’s a federation of seven emirates including Fujairah, though Abu Dhabi is the capital and holds the most sway politically.

Close Story

Less time to read?

Try Quickreads

  • An ambulance and armed police are seen during the evacuation of people at the Fields shopping center in Copenhagen, Denmark, on July 3, 2022 after Danish media reported a shooting. (Photo by Olafur Steinar Gestsson/Ritzau Scanpix/AFP)

    3 dead after shooting at shopping mall in Copenhagen; one arrested

    The Royal House said on its website late on Sunday that an event in southern Denmark to commemorate the end of the first three stages of the Tour de France cycling race, hosted by the Danish Crown Prince and with Prime Minister Mette Frederiksen in attendance, had been cancelled.

  • People rally in support of abortion rights Saturday, July 2, 2022, in Kansas City, Mo. (AP Photo/Charlie Riedel)

    Texas clinics halt abortions after state high court ruling

    The Friday night ruling stopped a three-day-old order by a Houston judge who said clinics could resume abortions up to six weeks into pregnancy. The following day, the American Civil Liberties Union said it doubted that any abortions were now being provided in a state of nearly 30 million people.

  • Other places from which Google will not store location data include fertility centers, addiction treatment facilities, and weight loss clinics.

    Google to delete user location history on US abortion clinic visits

    "If our systems identify that someone has visited one of these places, we will delete these entries from Location History soon after they visit," Jen Fitzpatrick, a senior vice president at Google, wrote in a blog post. "This change will take effect in the coming weeks."

  • Professor Ajay Agrawal, who was honoured with the Order of Canada in the 2022 list. (Credit: University of Toronto)

    Two Indo-Canadian academics honoured with Order of Canada

    Two Indo-Canadian academics, working on research to advance the betterment of mankind, have been honoured with one of the country's most prestigious awards, the Order of Canada. Their names were in the list published by the office of the governor-general of Canada Mary Simon. Both have been invested (as the bestowal of the awards is described) into the Order as a Member. They are professors Ajay Agrawal and Parminder Raina.

  • SpaceX founder and chief engineer Elon Musk.

    Elon Musk's Twitter hiatus, in 2nd week now,  generates curiosity 

    The world's richest person, Elon Musk, has not tweeted in about 10 days and it can't go unnoticed. The 51-year-old business tycoon has 100 million followers on the microblogging site, which he is planning to buy. Since April, he has been making headlines for the $44 billion deal and his comments and concerns about the presence of a large number of fake accounts on Twitter.

Story Saved
Saved Articles
My Reads
Sign out
New Delhi 0C
Monday, July 04, 2022