Iran shipped billions in oil during its ceasefire with the US

By STACY COWLEY

With the mid-June peace agreement between Iran and the United States unraveling, Iran could be aided by the billions of dollars it took in as it shipped oil out of the country after the June deal, a concession granted by the United States.

That money will be a strategic advantage for Iran’s leadership if the two countries return to open warfare.

As part of the June deal, the United States gave Iran two majwor concessions: It lifted its naval blockade, allowing Iranian ships to move oil out of the country, and granted an exemption to U.S. sanctions on Iranian oil sales.

The Trump administration revoked that sanctions waiver on July 7, after three tankers were attacked in the Strait of Hormuz. But Iran had already moved quickly to get its ships through the strait and headed toward Asia, where it has long had a network of buyers for its illicit oil sales.

Here’s what we know about Iran’s oil shipments:

Oil is an economic lifeline for Iran.

Oil exports through the Strait of Hormuz accounted for about 80% of total Iranian exports before the United States started blocking its ships. The blockade trapped more than 1.5 million barrels of Iranian oil a day.

When the United States lifted the blockade, Iran rushed some 45 million to 50 million barrels out of the country, analysts estimated. Those barrels are worth billions — giving Iran a much-needed cash infusion for its ravaged economy.

Iran’s ‘shadow fleet’ helps it evade sanctions.

Countries under oil-sales restrictions use so-called ghost fleet ships to move their wares to buyers. Such ships use physical and bureaucratic camouflage, like flying false flags and turning off their location transponders, to hide their movements and their ownership.

Iran has for years sold most of its oil to China’s so-called teapot refineries. They are a collection of small, private businesses that operate without official government permission, and are among the few buyers willing to risk the consequences of flouting America’s sanctions in exchange for deeply discounted rates.

The Trump administration’s waiver of sanctions on Iran last month — which have now been reinstated — was a huge win for Iran’s leadership. It allowed the country to sell its oil at market prices.

The blockade was reimposed on July 14. Successfully enforcing it requires a huge military commitment.

Iran needs the profits from those oil sales.

Selling its exported oil has raised much-needed cash for the Iranian government as its conflict with the United States escalates. The war’s costs and physical destruction pushed Iran’s already struggling economy into a free fall, and the prices of everyday essentials like food and medicine have soared.

As U.S. sanctions again cut Iran’s chief export off from the world economy, the tens of millions of barrels of oil heading toward Asia are a valuable asset for the Iranian regime.