US targets remaining Iran crude exports: Update

Updates with details throughout

The US administration today announced additional restrictions on Iran's ability to export oil, just as the French government is undertaking a diplomatic effort to loosen Washington's economic embargo against Tehran.

The US actions placed additional oil tankers carrying Iranian crude on its sanctions list and offered a $15mn reward to help disrupt Iran's oil exports.

"We are intensifying our maximum pressure campaign," the US State Department's Iran envoy Brian Hook said. The action aims to disrupt an "oil for terror" network run by Iran's Islamic Revolutionary Guard Corps (IRGC), Hook said.

The French mediation proposal involves extending a credit line to Tehran, backed by Iran's oil revenue. In return, Iran would commit to fully complying with the nuclear deal. But that proposal would require cooperation from Washington, which since 2018 has implemented a sanctions regime aimed at preventing Tehran from selling oil and other export commodity in global markets.

And Washington for now shows no intention to cooperate. "Our actions today speak rather clearly," Hook said. "There will be more sanctions coming. We cannot make it any more clear that we are committed to the campaign of maximum pressure and we are not looking to grant any exemptions or waivers."

But the French mediation and US president Donald Trump's willingness to discuss it and consider a meeting with Iran's president Hassan Rohani may have put his administration in a bind.

"There is no concrete proposal that has been generated," Hook said about the oil-backed loan proposal.

Trump "is very much open to a number of options, but we need to see a change in Iran's behavior," Hook said. But Hook added a qualification to Trump's statement last week that he would be open to a meeting with Rohani "if the circumstances are correct."

The "circumstances" Trump mentioned refer to Tehran's acceptance of the 12-point ultimatum outlined by US secretary of state Mike Pompeo, Hook said. That ultimatum demands major changes in Iran's foreign and domestic policies and is seen in Tehran as tantamount to regime change.

By contrast, Trump stressed just two of those conditions in his remarks, focusing on Iran's nuclear and missile programs. Tehran, in turn, lists the lifting of US sanctions as a condition for a possible presidential summit.
Iranian crude exports have plummeted to below 400,000 b/d from more than 2.1mn b/d before the US withdrew from the nuclear deal in May 2018. But to the consternation of US officials, they are not yet at zero, even though US sanctions in effect since early May would subject any foreign buyer of Iranian crude to financial and criminal penalties from the US.

Hook said that the IRGC-managed operations have managed to export "hundreds of millions of dollars" of oil since May. The US will continue to target all potential buyers, and the offer of a financial reward is meant to ensure the US has visibility on "all the touch points along the chain of oil sales," Hook said.

The Treasury Department today added six new tankers to its list, including the St Kitts and Nevis-flagged Bonita Queen that it says is on its way to Syria with a cargo of Iranian oil. The other tankers added to the sanctions list today are the Iran-flagged Jasmine, Sarak, Sobar and Solan and the Panama-flagged Tour 2. The Treasury already placed the Iran-flagged Adrian Darya 1 on its sanctions list on 30 August.

The Treasury sanctions also target Iran's former oil minister Rostam Qasemi, who Washington says oversees the IRGC-backed oil sales. "In spring 2019 alone, (the IRGC) network employed more than a dozen vessels to transport nearly 10mn bl of crude oil, predominantly to the Syrian regime," the Treasury said. It said that Iran has resorted to selling its crude by masking it as Iraqi cargoes.

The Treasury also imposed sanctions on India-based Mehdi group that it says provides crews for the Iranian tankers. Another addition to the US sanctions list is Iran-based marine insurance firm Kish P&I Club, which provided third-party liability cover to Iranian vessels transporting oil to India before the US sanctions came into full effect.