The US has announced that it is taking decisive action against Iran’s “shadow fleet” – a group of vessels with offshore stockpiles of crude oil that Tehran is attempting to sell at below-market prices.
Iran Evades US Sanctions Through Ship-to-Ship Transfers
PACIFIC OCEAN (Oct. 1, 2024) The Independence-class littoral combat ship USS Mobile (LCS 26) comes alongside the Nimitz-class aircraft carrier USS Theodore Roosevelt (CVN 71) for a fueling-at-sea, Oct. 1, 2024. Theodore Roosevelt, flagship of Carrier Strike Group 9, is underway conducting routine operations in the U.S. 3rd Fleet area of operations. An integral part of U.S. Pacific Fleet, U.S. 3rd Fleet operates naval forces in the Indo-Pacific and provides he realistic, relevant training necessary to execute the U.S. Navy’s role across the full spectrum of military operations – from combat operations to humanitarian assistance and disaster relief. U.S. 3rd Fleet works together with our allies and partners to advance freedom of navigation, the rule of law, and other principles that underpin security for the Indo-Pacific region. (U.S. Navy photo by Mass Communication Specialist 3rd Class Richard Tinker)
Littoral Combat Ship. Image Credit: Creative Commons.
Using a method called ship-to-ship transfers, or STS, Iranian tankers often try to sell their oil supply, which the US has blocked, to oil brokers in Asia and other regions, and often misrepresent the source of the oil, banking on a lower selling price.
Washington has turned its gaze towards oil brokers in Malaysia and Singapore, saying that a number of these players are helping Iranian vessels offload their supply, indirectly contributing to the terrorist activities the US is accusing Iran of bankrolling.
Groups that monitor Iranian ships say that STS transfers are critical to Tehran’s sanctions-avoiding efforts, following the imposition of the US blockade of oil exports from Iran.
Iran stored large quantities of oil outside of the Strait of Hormuz before the blockade took effect. The blockade has since effectively reduced the country’s exports to zero, contributing to major economic problems.
Iranian Economy In Dire Straits
US sanctions have pushed the Iranian economy into a deep recession, with inflation reportedly ranging from 57% to 84%. Reports indicate Iranians are struggling to get by, with prices for goods and basic commodities like vegetable oil, eggs, and meat up 431%, 342%, and 157%, respectively.
Medicine is even worse, with prices soaring by up to 500%.
While the Supreme Council of Iran gave workers a significant minimum-wage increase, analysts say a common worker’s pay still falls far short of covering the combined costs of food, utilities, and rent.
US Believes it Has More Leverage in Negotiations.
Iran’s dire economic condition has emboldened US officials, who have been quick to heap praise on the US offensive – both military and economic – against the country.
In a statement, US Treasury Secretary Scott Bessent said that the “Treasury is starving the tyrannical regime in Tehran of the money it uses to wage war in the region, and we will continue exposing those who enable the regime’s oil sales,” referring to Tehran’s shadow fleet.
The US has dubbed its economic warfare against Iran as “Operation Economic Outcast” – a sanctions campaign aimed at isolating Iran and pressuring the regime to come to the table with the United States.
Speaking during a recent visit to Greece, US Secretary of State Marco Rubio boasted that Iran has “lost complete control” of the Strait of Hormuz, while stressing that any agreement with Iran the US would sign should include provisions that would guarantee that Iran would never develop or own nuclear weapons of any kind.
“Iran cannot have a nuclear weapon, simple, period, end of story,” Rubio said.
US Contemplating Options for Resumption of Military Operations
To add pressure on Iran, senior officials and advisers to the president recently met at Camp David, and afterward the Pentagon reportedly instructed CENTCOM to complete preparations to resume military action.
On October 8, however, the president confirmed he would not proceed with plans to launch new strikes ahead of the November midterm elections.
There is no timeline yet for when the US will ramp up attacks against Iran, or indeed any confirmation of what that attack will look like.
However, recent reports suggest President Trump was seeking a quick but decisive win ahead of the upcoming midterm elections.
However, the president’s announcement that he would not move forward with the strikes could well reflect concerns that it would further destabilize the region and send prices skyrocketing even higher.
US Consumers Wait With Bated Breath
As the war effort continues, Americans still have to grapple with higher gas prices until US efforts start to pay off.
While Middle East oil exports have reportedly come close to, or even met, pre-war averages, gasoline and diesel prices across the US remain at historic highs.
The average per-gallon price of gas in America stands at $4.36, with consumers in states like California and Hawaii, where the cost of living is higher, paying an average of $6.34 and $5.63, respectively, for every gallon of gas they use.
About the Author: Tim Ramos
Tim Ramos has written for various publications, corporations, and organizations, covering finance, politics, travel, entertainment, and sports in Asia and the U.S. for more than 10 years.
