A lot of dimensions to the campaign against Iran’s regional aggression aren’t making it into the mainstream Western news. That may well be a good thing, and it may be a good thing that this article itself will probably miss events and influences. Highlighting developments that could be polarized around to Iran’s advantage isn’t necessarily a useful service.
But after the UK’s Royal Marines seized a Panama-flagged, Dubai-owned super tanker last week off Gibraltar, which was carrying 2 million barrels of Iranian oil bound for Syria, a couple of questions nagged at me. Pulling the string on them put a bigger picture in perspective.
It’s worth laying out because the answers indicate the decisive, even politically kinetic effect sanctions are starting to have. And the effect goes beyond squeezing Iran’s bank account.
The questions for me were, first, why Iran had put so much oil in one shipment, which increased the single-incident loss if the ship didn’t make it through to Syria; and second, why Iran reacted so noisily, immediately acknowledging the cargo as Iranian (when care had been taken to load it somewhat covertly, on a ship without overt Iranian ownership or management), and issuing threats against the UK rather than trying quieter diplomacy through the EU.
The seized tanker
Let’s take a moment to set forth the context for these questions. The tanker Grace 1 was seized in territorial waters off Gibraltar because the ship was headed for Syria with a cargo of crude oil, violating EU sanctions on Syria. The interdiction wasn’t about U.S. sanctions on Iranian oil exports; it was about EU sanctions on the Assad regime.
Nevertheless, the summary report at the Lloyd’s news site indicated Iran had taken her signature precautions to obscure the origin of the cargo. The ship’s connection to Iran has to be assumed from peripheral clues rather than being overtly evident: Grace 1 appears to be owned by a company in Dubai and managed by a company in Singapore, and is (convenience) flagged in Panama. Lloyd’s describes the start of the tanker’s current voyage as follows:
Lloyd’s List reported earlier this week that Grace 1 was heading for the British overseas territory after loading a 2m-barrel cargo in Iranian waters around mid-April, according to vessel-tracking data.
The tanker used the same strategies and tactics previously used by tankers shipping Iranian crude to China and Syria. Its Automatic Identification System was turned on and off to avoid detection of its location, cargo origin and destination.
The ship sailed around the Cape of Good Hope after loading around mid-April off Iran and spending time at anchor in two different locations in waters off the United Arab Emirates.
All very typical for ships carrying Iranian crude and trying to evade U.S. sanctions. These details are of a common type as well:
Lloyd’s List understands that the owner of the very large crude carrier is Russian Titan Shipping, a subsidiary of Dubai-based oil and energy shipping company TNC Gulf, which has clear Iranian links. [Note: in this case, the “Iranian links” are the Iranian names and backgrounds of TNC Gulf executives. The information on their backgrounds comes from LinkedIn profiles, not from a company-hosted webpage – J.E.]
The ship’s opaque ownership and operating chain is complicated further by company websites linked to the tanker not operating.
The European Commission-operated Equasis website lists the shipmanager as Singapore-based Iships Management.
However, the website is under construction and its telephone number is not in service.
Websites for Russian Titan Shipping and TNC Gulf are also not working.
In other words, the owner and shipmanager have “shell company” written all over them. Grace 1 is the only ship listed under Russian Titan Shipping ownership, meaning the ownership structure was set up solely for the one ship (a common industry practice, used in good faith, but one frequently exploited for the purpose of obscuring ownership by shell companies). Iran went to trouble to obscure her tracks with Grace 1 and the oil bound for Syria.
The ship, a Very Large Crude Carrier (VLCC), would exceed tolerances for a Suez transit if fully loaded, which would be one explanation for the long voyage around Africa. But another explanation, always applicable to moving Iranian crude around, is that it’s easier to get away with turning off the AIS, making possibly unnecessary port calls, and trying to fade into the shipping noise going around Africa.
Egypt is cracking down on game-playing by Iranian oil carriers – and a ship with a cargo of 1.1 million barrels of Iranian oil was detained by Egyptian authorities in November 2018 (officially for improperly entering Egyptian waters) and has not seen its situation resolved in the eight months since. The ship, Sea Shark, was declared for Turkey back in November, but is still sitting at anchor south of Port Suez, off Ain Sokhna. The Sea Shark situation seemed to daunt Iran for several months.
The impact of multi-pulse sanctions
All that said, the most arresting thing in the Lloyd’s report is this information:
Gibraltar’s chief minister Fabian Picardo said the government had “reasonable grounds” to believe the tanker and its crude cargo had breached European Union sanctions against Syria.
The crude was heading to the Baniyas Refinery in Syria, he said, without expanding on how or why the government held this view or from where the intelligence came.
Because the action off Gibraltar was predicated on the ship being bound for Syria, and that information is referred to as “intelligence” of unstated origin, EU observers have concluded that the intelligence came from the U.S. (There is no public evidence that Grace 1 ever declared Syria as her destination, which again is common for ships trying to evade sanctions.)
Gibraltar has said the intelligence didn’t come from the U.S., and that the seizure of Grace 1 was not executed under American pressure. But it’s probable that this first-ever seizure of a Syria-bound tanker with a cargo of oil, based on the EU sanctions against the Assad regime, is in fact evidence of cooperation between the U.S. and the UK to – as it were – kill two birds with one stone. The move simultaneously thwarts both Iran and Assad.
It doesn’t thwart Iran because the regime was going to earn money from a sale. Iran has been providing oil to Assad on credit for several years, and it’s unlikely Assad’s tab will ever actually be paid.
Rather, it thwarts Iran’s strategic goals in Syria, which start with keeping the Assad regime in business. Assad has been under a severe oil crunch, partly because sanctions on Iranian exports are being more rigorously enforced now, and partly because virtually all the oil indigenously available in Syria is located in the northeastern region controlled by the Kurds. Iran, under sanctions herself, has been Assad’s oil lifeline.
After the tanker Sea Shark was detained in Egypt in November 2018, Iran halted seaborne oil shipments to Assad for about four months. In May, deliveries resumed, with five tankers – although not Sea Shark – making it north through the Suez Canal (by declaring for non-Syrian destinations) and being seen in satellite imagery at oil terminals off Syria.
The first tanker to dare the approach to Syria in May 2019 did so after heading to Turkey from the Suez Canal and lingering there for a bit, according to TankerTrackers, which uses AIS and satellite imagery to keep tabs on the illicit oil trade. It was able to offload 1 million barrels of oil to Syria. A handful of other tankers have since been able to deliver cargoes of 1 million barrels or less.
Recent developments: A dynamic picture
In fairly rapid succession, however, two things happened in June and July. The first received hardly any notice in the Western media. On 22 June, an explosion apparently set deliberately (reportedly by divers) took out pipelines to the marine terminal at Baniyas Port, Syria, located close to the Baniyas oil refinery. (Regional media have described up to five pipelines being affected.)
— Qalaat Al Mudiq (@QalaatAlMudiq) June 23, 2019
Interestingly, that explosion rocked the Syrian oil infrastructure two days after the U.S. Global Hawk UAV was shot down in the Gulf of Oman by an Iranian missile on 20 June 2019.
Then, on 4 July, Gibraltar seized Grace 1, with the help of British commandos.
As interesting as the timing of the marine terminal explosion is the timing of the oil shipments from Iran to Syria that enlivened this saga in May and June. They left Iranian waters in March, April, and May – including Grace 1 (which left the vicinity of Kharg Island in mid-April, according to Lloyd’s). Besides going all the way around Africa, Grace 1 sat at anchor off the UAE for unspecified amounts of time on two separate stops. That’s uncommon for legitimately contracted oil shipments, but fits the pattern of a sanctions-evader’s movements, whether it is attempting to disguise them or waiting for backdoor-brokered spot sales. (The latter is unlikely with a cargo of sanctioned crude.)
Grace 1 also carried by far the largest cargo of crude, loaded with 2 million barrels. That’s what caught my attention when the news broke of her seizure. The other tankers that went to Syria while Grace 1 was making her way around Africa had about half the amount of oil each.
One hypothesis about this set of events would be that the smaller cargoes to Syria, which were needed in any case, could also serve to draw attention away from Grace 1. Any single smaller shipment would have been a less-debilitating loss, and breaking the shipments up enabled Iran to shut down the enterprise – the daring shipments through the Suez Canal – at any time without paying an undue cost. (Presumably all the tankers involved were declared, like the first one in May, for non-Syrian ports when they went through the Canal.)
But in this hypothesis, the smaller shipments got through because the U.S. – and probably others – were onto Tehran’s game. (The warnings the U.S. was issuing to Iran in early May, at the time the first resumed delivery to Syria got through, seem in retrospect to indicate something along those lines. This very odd incident involving an Iranian tanker in the Red Sea occurred about the same time; clearly, the U.S. had reason to be especially alert to Iranian tanker activity.)
Both the UK and Israel have the intelligence resources to recognize this kind of pattern emerging. A tipoff from any one or more of these three nations could set up a jointly framed snare in which Egypt agreed to allow the smaller cargoes through the Canal, while the U.S. and UK worked on the Grace 1 takedown.
Allowing the smaller cargoes through would be worth it, to impress on the Iranians our ability to track and interdict the Grace 1 – a much bigger prize, not only because of the cargo size but because Grace 1 represented such an investment of time and effort for Iran.
The time and investment indeed were extraordinary, and may have represented something beyond the intention merely to deliver oil for Syria’s own use. After the preceding deliveries since early May, Assad should have been in much better shape than he had been for months. (Before the sanctions crunch in late 2018, Iran was providing him with about 3 million barrels a month.) Perhaps Iran hoped to have some or all of the 2 million barrels of crude on Grace 1 refined in Syria for resale, something that could be accomplished with refined fuel through spot selling and ship-to-ship transfers at sea.
Such an enterprise would increase Tehran’s options for moving oil products under the prohibitive scrutiny and tightening sanctions environment now being enforced. Taking such a flyer, and having it shut down off Gibraltar after a long, hopeful voyage from Iran, would also help explain the fury of the Iranian reaction.
It seems unlikely, meanwhile, that the remarkably-timed explosion at the Syrian marine terminal in June was mere happenstance. But it is fruitless to speculate at length on the how and who of that. The bottom line in the sum total of these events is that they would convey a strong message to Iran, while denying Assad an oil shipment of significant size.
A new-generation message from the Trump administration
Iran’s relatively circumspect operational stance in the Persian Gulf since the downing of the U.S. drone obviously takes on a new aspect in light of the explosion at the marine terminal, where tankers had recently been delivering Iranian oil. There’s a feel to this of an unmistakable signal to the Iranian regime: “We see you, and we can put a stop to you at any time.”
The points to be made about this are about tactical and operational understanding of the opponent. In that sense, they are very Trumpian, as opposed to the stately-paced diplomatic and policy conventions we’ve been accustomed to in U.S. practice since 1945.
An initial observation may serve as the answer to the second question that occurred to me about the Grace 1 seizure; i.e., why Iran reacted with such a public snit-fit. One answer would be that the mullahs are being confronted with tactics that actually penetrate their OODA loop, and they’re not used to it. It infuriates them, partly because they are actually being thwarted, and partly because they aren’t seeing it coming.
It looks to me as if Iran’s move after the seizure is to try to force the issue with the EU, as the path of least resistance. That’s to be expected.
But consider as well what had just occurred only days before the Grace 1 takedown. The U.S. and Russia met with Israel on 25 June, at the national security adviser level, to discuss the future of Syria. The readout from that unprecedented meeting has been minimal, but Benjamin Netanyahu, the host, felt quite free to announce afterward his gratification that Israel’s insistence on an Iran-free Syria was being taken seriously.
Russia’s representative didn’t overtly endorse that Israeli statement, but he didn’t repudiate it either. That’s enough to make it clear that supporting Iran’s plans in Syria is not, shall we say, Moscow’s highest priority.
Trent Telenko at the lively Chicago Boyz blog picked up on a related development that’s worth noting, just in the last week. He points out the resemblance between the drones the Hezbollah-supported Houthis in Yemen are using against Saudi Arabia, and the drones with which attacks have been mounted on the Russian air base in Syria at Hmeimim. Telenko wonders, based on this and other information, if it’s a sign that Iran is authorizing a lashing-out by proxy against the Russian forces in Syria; i.e., a sign that all is not well between Moscow and Tehran in terms of reconciling their priorities in the theater.
It could be. That issue is too large to try to address here, but the potential evidence of kinetic effects creeping into it is eye-catching. Assad has had to turn to Russia in recent months as a source of fuel for some purposes,* and Russia would find that position advantageous vis-à-vis Assad, whereas it would be the opposite for Iran.
If Iran’s influence with Assad slipped ever so slightly in Russia’s favor, at the same time Russia was huddling with the U.S. and Israel to chat about Assad’s future, and Syria’s marine terminal was exploding right after Iranian misbehavior in the Persian Gulf – well, that would be a really bad time for the Grace 1 to get surprised by a passel of sweaty Brits dropping down from helicopters in the Strait of Gibraltar, putting paid to Iran’s big plan to ride over the hill to Assad with 2 million barrels of crude oil.
Hate-enriching uranium beyond 3.67% purity, and now threatening to take it higher unless the EU-3 do something desperate pronto, seems to be what Iran’s regime can immediately think to do. But it’s got to be at least somewhat alarming that one of the EU-3 is the UK, which spearheaded the takedown of the Grace 1 a few days ago. Unity isn’t looking like a strong factor in the mullahs’ JCPOA support structure.
If this analysis is valid, what we’re seeing is a negotiating dynamic of a kind the American Republic engaged in a century or more ago, before Woodrow Wilson sketched a Kantian, internationalist vision to guide us and FDR settled us in comfortably as a Great Power, navigating by summitry and mighty, universalist thought-sets.
I suspect most of our legacy foreign-service and international-affairs types will quickly find this operating mode exhausting. But in July 2019, with respect to Iran, it’s doing something of particular importance. It’s putting direct pressure on the Iranian regime’s highest strategic priorities: Syria, and funding Iran’s regional aggression with oil and gas exports. Combine that with Trump’s uneasy bilateral progress with the Kim regime in North Korea, Iran’s chief nuclear-weapons buddy, and the moves being made by his administration are bypassing the weak link in our JCPOA chain – the EU – to good effect, by using operational-level options against radical Iran’s interests at their most vulnerable points.
This isn’t your father’s Pax Americana. But that ended in Obama’s first term anyway, when the un-tending of Lebanon, after Hezbollah’s coup against Saad Hariri, unleashed the Arab Spring in early 2011. It’s not coming back.
Trump isn’t a doctrine-proclaiming kind of guy; no question about that. I’ve always wished he would make more use of the power of national-interest rhetoric. But he’s getting more done than the mainstream media can even perceive, much less be willing to report on.
Those who follow Iran’s sanctions-busting know that the oil and gas exports have not by any means been entirely shut down. But even accounting for China’s quiet collusion to violate U.S. sanctions, Iran’s exports have been significantly reduced from their level after the JCPOA was implemented in January 2016, when sanctions were comprehensively suspended. The overhead cost of violating sanctions, in terms of extra effort required, difficulty of operation, and sheer friction, has soared since the Trump administration clamped down in late 2018.
Moreover, Trump is moving on multiple fronts to stymie Iran, rather than stovepiping separate efforts. In key ways, Trump has Iran more boxed in and discombobulated than the radical regime has been at any time since the war with Iraq ended in 1988.
One more thing this dynamic, CinemaScopic visual of Trumpian geopolitics explains: why Pompeo and Bolton always look like they’re having more fun than a barrelful of monkeys.
* Even that energy safety valve for Assad is in some peril, as it turns out. Russia has been buying fuel from a Danish company and using it for military operations in Syria, according to a case now being processed in Denmark. The Danish company would be violating EU sanctions with such sales, and although the limited reporting doesn’t clarify it, the sales have probably been shut down.