US Attempts To Checkmate Iranian Oil Delivery Network

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) on Sept. 4 imposed sanctions on an expansive global shipping network, which it said is managed by the Islamic Revolutionary Guard Corps-Qods (IRGC-QF).

"Over the past year, the IRGC-QF has moved oil worth hundreds of millions of dollars or more through this network for the benefit of the brutal Assad regime, Hizballah and other illicit actors," OFAC said.

"Senior IRGC-QF official and former Iranian minister of petroleum Rostam Qasemi oversees this sprawling network, which features dozens of ship managers, vessels and facilitators," the agency added. "This complex network of intermediaries enables the IRGC-QF to obfuscate its involvement in selling Iranian oil."

Sigal Mandelker, the Treasury undersecretary for terrorism and financial intelligence, said in a statement that the shipping network scheme "demonstrates how economically reliant Tehran is on the IRGC-QF and Hizballah as financial lifelines."

According to OFAC, in the spring of this year alone, the IRGC-QF used more than a dozen tankers from this network to ship about 10 million barrels of crude oil, mostly to Syria, with a value of more than $500 million. The ships also transported an estimated 4 million barrels of condensate and "hundreds of thousands of barrels" of gas oil to generate another $250 million for Iran.

From the shipping network, OFAC has added 16 entities and 10 individuals, as well as 11 ships, to its Specially Designated Nationals and Blocked Persons (SDN) List.

OFAC identified a significant participant in the Iranian oil shipping network to be India-based Mehdi Group and its director, Ali Zaheer Mehdi. The company crews and manages at least seven vessels among at least 10 subsidiaries and shell companies, according to OFAC.

OFAC said the crude oil and condensate sold by the IRGC-QF network is provided by the National Iranian Oil Company (NIOC).

The IRGC-QF uses several front companies in Lebanon to hide its oil sales. The companies are overseen by Hizballah officials Muhammad Qasir and Muhammad Qasim al-Bazzal, who already are included on OFAC's SDN List.

The Iranian-controlled shipping network also transports other commodities, including iron and metal products from Iran.

Mahmud Ashtari, who is managing director of Hamrahan Pishro Tejarat Trading Co., charters ships and transports cargo to Syria and China. Through the network, Ashtari's company has participated in the international sale of "tens of millions of dollars" in Iranian steel debar.

"Mahmud Ashtari has received hundreds of thousands of dollars for vessel expenses and contracts, often related to iron or metal shipments from Iran. He also ensures ports can accommodate the vessels and advances their discharged goods toward their final destination," OFAC said.

Ashtari and his company were added to the SDN List on Sept. 4.

All property and interests in property of those entities and individuals on the SDN List that are in the U.S. or in the possession or control of U.S. persons are blocked. Any business conducted with these entities or individuals is prohibited.

On Sept. 4, OFAC issued a new seven-page advisory to the maritime industry warning against its participation in illicit shipping schemes, such as the IRGC-QF's "oil-for-terror" shipping network.   

OFAC has added nearly 200 vessels to the SDN List since Nov. 5, 2018, for their role in transporting illicit oil shipments.

"Targeting shipments of petroleum and petroleum products from Iran is a critical element of denying the Iranian regime access to financial resources to support its malign activities," OFAC's maritime industry advisory said.

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