British Forces Seize Oil Tanker



British Forces Seize Oil Tanker
British special forces seized a supertanker off Gibraltar suspected of carrying Iranian oil to Syria in violation of European and U.S. sanctions against the war-torn country.

(Bloomberg) -- British special forces seized a supertanker off Gibraltar suspected of carrying Iranian oil to Syria in violation of European and U.S. sanctions against the war-torn country.

Grace 1, which can hold 2 million barrels of crude, is now anchored near Gibraltar, a British overseas territory in southern Spain that controls the strait between the Mediterranean Sea and the Atlantic Ocean. The vessel is registered in Panama.

The seizure, announced by Gibraltar’s government, could inflame tensions between Iran and the European Union just as the U.K., France and Germany try to keep the Islamic Republic from walking away from the nuclear deal. The U.S. quit the pact a year ago, prompting Iran to significantly increase uranium enrichment in response.

While Syrians will feel the immediate impact of halting the crucial oil shipment to the country, the arrested vessel shows the difficulty Iran faces in finding outlets for its crude as President Donald Trump’s administration ramps up sanctions.

“We have detained the vessel and its cargo,” said Fabian Picardo, Gibraltar’s chief minister. “This action arose from information giving the Gibraltar government reasonable grounds to believe that the vessel, Grace 1, was acting in breach of European Union sanctions against Syria.”

Suez Ban

Gibraltar didn’t say where the crude came from, but shipping tracking data compiled by Bloomberg suggest the vessel loaded at Iran’s Kharg Island oil terminal in mid-April. After anchoring off the United Arab Emirates for several weeks, the ship began a journey around the southern tip of Africa, passing Cape Town in early June, rather than taking the more direct route through the Suez Canal.

That route from Iran to Syria is about 23,300 kilometers (14,500 miles), compared with just 6,600 kilometers via the Red Sea and Suez Canal. A ship the size of the Grace 1, known as a Very Large Crude Carrier, or VLCC, can’t pass through the canal fully loaded. The shorter route would require it to discharge half its cargo, load it on to a smaller ship or send the oil through the Sumed Pipeline, and pick it up again in the Mediterranean.

Iran can’t pump oil through the pipeline, which spans Egypt from the Red Sea to the Mediterranean, because the link is owned by companies from Egypt, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar. The pipeline’s owners have not permitted the transit of Iranian crude since August 2012.

Iran has regularly supplied Syria with crude since the country descended into civil war in 2011. Iran backs the government headed by President Bashar Al-Assad, which has been sanctioned for most of this decade due to its bloody crackdown on the country’s civilians.

Syria receives Iranian crude despite the embargo. It imported at least 32,000 barrels a day in 2018 and 66,000 in 2017, according to tanker tracking data compiled by Bloomberg. It has imported similar volumes so far this year.

Gibraltar said Grace 1 was destined for the Baniyas refinery, which is owned by the Syrian government and is subject to both U.S. and E.U. sanctions. Three of the facility’s underwater oil pipelines were allegedly sabotaged with mines in June, according to Syrian TV, potentially complicating the unloading of cargoes there.

“We welcome this firm action to enforce EU sanctions against the Syrian regime,” Prime Minister Theresa May’s spokesman James Slack told reporters in London after the tanker seizure. “This sends a clear message that violation of the sanctions is unacceptable.”

--With assistance from Thomas Penny.

To contact the reporters on this story:
Verity Ratcliffe in Dubai at vratcliffe1@bloomberg.net;
Julian Lee in London at jlee1627@bloomberg.net;
Javier Blas in London at jblas3@bloomberg.net

To contact the editors responsible for this story:
Nayla Razzouk at nrazzouk2@bloomberg.net
Mohammed Aly Sergie, Bruce Stanley



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