Iran threatens retaliation if oil on Suez Rajan is unloaded

The commander of Iran’s Revolutionary Guards’ navy has said that Iran would retaliate against any oil company unloading Iranian oil from crude oil tanker Suez Rajan (IMO 9524475), seized many months ago and which has been sitting off Houston, Texas, since May 30th.

In April, the US confiscated Iranian oil on the Suez Rajan in a sanctions enforcement operation (IMN, May 12th 2023).  

The Wall Street Journal reported last week that American companies were refusing the work to offload the tanker for fear of retribution from Iran.

The US government seized the Suez Rajan after it was caught transferring sanctioned Iranian oil off Singapore. It then set off on a 13,000nm trip to Houston, where, it was intended, the oil would be offloaded, sold, and the profits distributed to victims of terrorism.

This time round, however, all of the tanker lightering operators in the state of Texas have said that they will not go anywhere near the cargo.

The Suez Rajan’s laden draft is too deep to reach any shore-based Gulf Coast import terminal without offloading part of the cargo. To get the oil to the refinery, cargo owner Houston Refining needs to lighter it off in smaller measures. To do this it would use a shuttle tanker. However, all lightering operators have refused. According to the WSJ and S&P Global they have done so for two reasons.

The first reason is the fear that the shuttle tanker’s reputation will be tainted for international sanctions purposes by its brief contact with Iranian cargo, even if that cargo is fully approved and authorized by the US government. “The stigma of having touched a sanctioned entity’s crude will be carried forever in the eyes of the rest of the world,” one shipowner told S&P Global.

The second is that any shipowner who lighters the cargo off will have to be ready for Iranian reprisals against any vessels connected to the company that later transited the Arabian Gulf.

Despite the extensive maritime security measures taken by the US and its allies, which have been stepped up even further over the past week, the fact that the leading US Gulf Coast lightering operators are global tanker companies, and that they own ships that pass by Iran regularly, has made them nervous. “Companies with any exposure whatsoever in the Persian Gulf are literally afraid to do it,” an unnamed energy executive told the WSJ.

That has meant that the Suez Rajan, with its untouched cargo, has been anchored off the coast of Texas since May 30th.

US-based lobbyist group United Against a Nuclear Iran (UANI) was first to bring the Suez Rajan to the attention of American authorities. It said that the case highlighted the need for a more substantial US naval presence in the Persian Gulf.

“The U.S. cannot enforce oil smuggling sanctions if the shipping and related industry businesses live in fear of Iranian retaliation. Without real American deterrence, Iran can act with impunity to defeat even the best crafted sanctions laws,” UANI’s CEO Mark D Wallace told the WSJ. However, it was not clear that increased US Naval spending in the region would calm the fears of the US multinationals. The risk to reward ratio would remain high.

2011-built, Marshall Islands-flagged, 81,282 gt Suez Rajan is owned by Fleetscape Suez Rajan LLC care of manager Empire Navigation Inc of Athens, Greece. It is entered with UK Club on behalf of Suez Rajan Ltd (expires Feb 20th 2024).