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US calls on Panama to withdraw registry of tankers carrying Iranian oil

The US has asked Panama to remove tankers from its registry that are violating sanctions on the trade in Iranian oil.

The US has been looking for various ways that it can use its international heft to get other countries to increase pressure on Iran and target the oil trade.

A meeting in Panama last Thursday March 14th was part of an effort to expand cooperation and collaboration to increase the pressure on the Iranian regime, said Abram Paley, Deputy Special Envoy in the U.S.’s Office of the Special Envoy for Iran.

Paley travelled to Panama with representatives from the Office of Foreign Assets Control (OFAC), the part of the US Treasury Department that administers and enforces economic and trade sanctions. Paley said that the US was working to expand enforcement of the sanctions as part of a larger diplomatic outreach campaign.

Paley claimed that in January alone the US identified six Panama-registered tankers that were transporting Iranian oil in violation of the sanctions. “Iran and actors related to Iran are trying to evade sanctions here in Panama. They are trying to abuse Panama’s flag registry,” Paley said.

Panama was recently passed by Liberia as the largest flag in terms of gross tonnage (although a mass defection from Liberia to Gabon by several large Russian vessels might flip-flop the leadership there), but Panama still has the most vessels in the world under its flag, with 8,500 in its registry as of 2023.

The administration of the registry has emphasized that it was increasing efforts to maintain the quality reputation of the registry. Between 2019 and 2023, they reported withdrawing the flag from 136 vessels that were associated with the Iranian state oil company. In June 2023, they said in the past two years as part of the enhanced enforcement and an elimination program the authority had cancelled more than 6.5m gt for issues related to Iran, North Korea, or vessels included in the list of international sanctions.

US-based hawkish NGO watchdog group United Against Nuclear Iran (UANI) has pointed out a rapid growth in the fleet transporting Iranian oil products. Its analysis claimed that the fleet jumped from 70 identified vessels in November 2020 to 395 vessels in November last year. UANI claims that 25% of the Iranian government’s revenue comes from crude and natural gas exports. “UANI has serious doubts regarding the seriousness of Panama’s flag authority,” the group alleged last year.

Panamanian officials said that the meeting with the US representatives was a dialogue on “continuity of bilateral dialogues related to maritime cooperation, reinforcing the positioning of the Panamanian Merchant Ship Registry in the international arena.”