US Sells Iranian Crude Seized En Route to Venezuela

An American flag waves outside the U.S. Department of Justice Building in Washington, on Dec. 2, 2020. Tom Brenner/Reuters

The Justice Department has announced the sale of around 1.1 million barrels of Iranian crude oil seized by the U.S. Navy from four foreign-flagged tankers that were en route to Venezuela.

The crude was the property of Iran’s Islamic Revolutionary Guard Corps (IRGC), which the United States and several other countries have designated a foreign terrorist organization, with the seizure taking place on an undisclosed date in or around the Arabian Sea.

The sale, with net proceeds of around $26.7 million, was made following an Oct. 1 court order that formalized the forfeiture. It came after the U.S. government filed a complaint in July 2020 alleging that the crude originated in Iran and that its sale would have benefitted the IRGC.

“In its opinion, the court found that the United States had sufficiently alleged that the petroleum products provided a source of influence over the IRGC because those properties were critical to furthering the affairs of the terrorist group’s enterprise,” the Justice Department said in a Dec. 7 release.

Proceeds from the sale may be directed to the U.S. Victims of State Sponsored Terrorism Fund, according to the Justice Department.

United Against Nuclear Iran (UANI), a non-profit non-partisan organization that aims to prevent Iran from obtaining nuclear weapons and tracks illicit Iranian oil shipments, said that in November 2021, it identified 149 foreign-flagged vessels suspected of involvement in illegal transfers of Iranian crude and/or petroleum products. That’s up from around 70 such vessels the group identified in November 2020.

“One of the most frequently deployed tactics in evading oil sanctions is ‘flag hopping,’” UANI said in a Dec. 1 statement, a tactic that involves repeated switching of a ship’s “flag” to different national registries, technically allowing such vessels to travel and dock legitimately.

“Often accompanied by the formation of new shell and front companies, ownership and name changes, and even alterations to ships’ physical markings, flag-hopping is a blight on legitimate maritime commerce,” UANI added.

Besides seizing IRGC-linked crude, the U.S. Navy also confiscated two large caches of Iranian arms, including 171 surface-to-air missiles and eight anti-tank missiles, the Justice Department said. The arms seizure took place in 2019 and 2020 during routine maritime security operations in the Arabian Sea, with the Justice Department saying the shipment had been orchestrated by the IRGC and the arms were destined for Houthi rebels in Yemen.

Undated photo showing type "358" surface-to-air missiles seized by the U.S. Navy in the Arabian Sea on Feb. 9, 2020. Justice Department

The Justice Department filed a complaint in August 2020 seeking to forfeit the seized weapons, which was granted on Nov. 15, 2021.

“In its opinion, the court found that the government had adequately alleged that the weapons belonged to the IRGC and that the IRGC constitutes an entity engaged in planning or perpetrating a federal crime of terrorism against the United States,” the Justice Department said.

U.S. Attorney Matthew M. Graves for the District of Columbia said in a statement that the successful forfeiture of the seized crude and weapons “demonstrate that not only can we disrupt the Islamic Revolutionary Guard Corps’ ability to finance its operations through petroleum sales, but we can also thwart its ability to use the proceeds of such sales to arm its terrorist proxies and export terrorism abroad.”