There is an old story about a disagreement between two bridge partners, where one of them criticizes the other’s play of a hand. In response, the criticized player asked:
“Well, how would you have played the hand?”
“Under an assumed name” was the reply.
There were perhaps echoes of this tale late last week when crude oil tanker Suez Rajan (IMO 9524475), which earlier this year headed from the Far East to the Gulf of Mexico with Iranian oil on board, only to become tied up in the logistical problem of finding a company willing to offload it, has now left US waters, but under another name. Now known as the St Nikolas, the vessel’s owners perhaps understandably want to put the publicity of the incident behind them – particularly given Iran’s public statements last week that it would retaliate in its own time to what it sees as the theft of its oil.
The US Department of Justice initially had highlighted the event as the first-ever criminal resolution involving a company that violated sanctions by facilitating the illicit sale and transport of Iranian oil.
The Suez Rajan (as was), a 12-year-old crude oil tanker, had found itself entangle, somewhat unwillingly, in the sequence of sanctions-avoiding moves undertaken by Iran in an attempt to export its crude oil. At the time the vessel was said by the DOJ to be owned by US investment firm Oaktree Capital Management and managed by Empire Navigation of Greece.
In February 2022, according to the DOJ, Empire Navigation received $1.2m for the charter of the Marshall Islands-registered Suez Rajan. The vessel was in ballast at the time.
It was then instructed to make a ship-to-ship (STS) transfer, receiving a small amount of crude from the Panamanian-flagged tanker CS Brillance. A few days after that the tanker Virgo showed up and made a second transfer to the Suez Rajan. However, the captain was instructed to show a single transfer from the CS Brilliance (IMO 9153513) in his logs. To the surprise of nobody, the oil from the Virgo was found to be Iranian, and the entire incident looked to be one of am attempt to greenwash the Iranian oil into apparently non-Iranian oil.
The DOJ was not fooled, and the US successfully argued that the captain and chief officer working for Empire Navigation knowingly falsified the records of the oil transfer in the logs of the Suez Rajan in order to conceal the fact the vessel loaded a sanctioned cargo of Iranian crude from the Virgo.
The US then won a civil forfeiture action in the US District Court for the District of Columbia for the crude oil cargo and was able to order the Suez Rajan, which had been in an anchorage near Singapore for nearly a year, to proceed to Houston to off-load the cargo (see IMN, February 23rd 2022, May 2nd 2023, and other posts).
In April this year Empire Navigation pleaded guilty and agreed to pay a $2.5m fine, take the standard four years’ probation, and cooperate with the US in the off-loading of the cargo.
That, though, was far from the end of the matter. When the Suez Rajan arrived at Houston Anchorage it would need lightering by a smaller vessel. For two reasons, none of the local shipping companies were willing to assist in lightering a portion of the oil to shore. The first reason was that the companies were fearful that by carrying any sanctioned oil would technically open them up to prosecution, even if it was oil that had been seized by the DOJ. The second fear was that any association with the project would make the companies owning or managing any such lightering vessels would become a target for Iran should any of their ocean-going vessels be sailing in the Arabian Gulf.
Empire Navigation eventually supplied a second vessel, the MR Euphrates for the lightering operation, and in late August, 18 months after the vessel took possession of the cargo, the oil transfer finally began.
The vessel left Houston on September 19th. Equasis dates the change to September 1st, presumably to give time for the paint to dry. Oaktree Capital has repeatedly said it sold the vessel in spring 2022. Equasis shows the ownership has remained with Suez Rajan Ltd. since May and that the management is unchanged with Empire Navigation. It is still registered in the Marshall Islands.
The newly identified St Nikolas shows that it is currently heading to Freeport in the Bahamas, where it is scheduled to arrive on Saturday September 23rd.
The US DOJ contends that the seized 980,000 barrels of oil would have been sold to a foreign entity, probably China, and that the profits from the oil sales would have supported the IRGC’s full range of malign activities – i.e., would have funded terrorism. It was expected that part or all of the funds from this case would end up with the US Victims of State Sponsored Terrorism Fund. Nevertheless, in terms of international law, the case set precedents on the extent of US jurisdiction that have made some in the industry uncomfortable. The only real link to the US was Oaktree Capita, a US company, which said that it had sold its interest almost as soon as it found out what was going on. Apart from that, the crew, the ship’s owner, its manager, and its flag, had nothing to do with the US.
2011-built, Marshall Islands-flagged, 81,282 gt Suez Rajan / St Nikolas 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 Fleetscape Suez Rajan, LLC.