Iran's seizure of Greek tankers underscores Russian-Iranian collaboration on oil smuggling

WASHINGTON DC (Kurdistan 24) Last Friday, Iran's Islamic Revolutionary Guard Corps (IRGC) seized two Greek oil tankers in the Persian Gulf.

One tanker was in international waters and the other near the Iranian coast when they were captured.

"Both vessels had come from Iraq's Basra oil terminal, loaded with crude," the Associated Press said in a report from Dubai. It also suggested that one tanker had picked up oil in Qatar as well.

Following Iran's seizure of the two tankers, Greece's shipping minister spoke with the Financial Times, which reported that he "had issued a 'strong recommendation' to Greek-flagged vessels to avoid all 'sea waters under Iran's jurisdictions.'"

Oil prices have risen sharply because of the crisis over Ukraine, and the minister's "strong recommendation" could further increase prices, the Times explained, because "Greece is a shipping powerhouse with almost a quarter of all oil supertankers sailing under its flag."

US, European Condemnation of Iranian Action

Iran's action was denounced by US Secretary of State Antony Blinken, who spoke with Greek Foreign Minister Nikos Dendias on Monday and condemned "in the strongest terms" Iran's assault on the two tankers.

"The United States stands with Greece, our key NATO Ally and partner in the face of this unjustified seizure," Blinken affirmed.

France and Germany also condemned the Iranian action. A spokesperson for the French Foreign Ministry issued a statement calling on Iran to "immediately release the crews and vessels."

"France reiterates its commitment to the rules of international law protecting the freedom of navigation and maritime safety," the statement affirmed, as it called "on Iran to immediately cease its actions that contravene these rules."

Similarly, the German Foreign Ministry issued a statement condemning "the seizure of the two Greek-flagged oil tankers in the Persian Gulf."

"Iran's actions are an unjustifiable interference in commercial shipping" and constitute a severe violation of international regulations," it continued, as Germany called on Iran "to release the ships and their crews immediately and to respect the right to free navigation and maritime security."

Background to Iran's Seizure of Greek Oil Tankers: Russian Dimension

Iran's seizure of the Greek-flagged tankers was retaliation for Greece's seizure of an Iranian-flagged tanker in the Mediterranean the month before.

Notably, there is a Russian aspect to these events, which provides yet one more indicator of collaboration between Moscow and Tehran in oil smuggling. 

The notion of such collaboration was first raised publicly by the US last week when the Treasury Department announced that it was imposing sanctions on an oil smuggling network, the profits of which went to the IRGC's Qods Force.

That Iranian network, the Treasury Department said, was backed by "senior levels" of the Russian government and its official, state-run economy. 

Read More: US sanctions Qods Force smuggling network linked to senior Russian officials

Greece seized the Iranian-flagged oil tanker on Apr. 15 after it entered Greek territorial waters. But on Apr. 15, the ship was flying a different flag: a Russian flag, and it had a Russian crew. 

In fact, the tanker was a ship that the US had designated for sanctions some eight weeks before, on Feb. 22, when Washington announced a series of penalties on Russian entities. 

The previous day, on Feb. 21, after several months in which Russian troops stood mobilized along Ukraine's borders, Russian President Vladimir Putin recognized two areas of Ukraine—the so-called Luhansk People's Republic and the Donetsk People's Republic—as independent political entities.

The Biden administration believed that Putin intended to invade Ukraine (which he did two days later). The sanctions were partly a response to Russia's declared support for the independence of the two areas of Ukraine and partly a last-ditch effort to deter Putin from attacking the country. 

Thus, the US announcement of the new Russian sanctions was unusually dramatic—intended to illustrate to Putin what lay ahead, if he actually invaded Ukraine. 

The announcement began with the sub-headline, "The United States Remains Fully Prepared to Impose Further, Expansive Economic Costs" and "New Sector Determination Enables Treasury to Target Russia's Entire Financial System."

Subsequent sub-headlines included "Targeting Elites and Families Close to Putin" and "Blocking Major Russian Financial Institutions."

The latter group included two banks "crucial to financing the Russian defense industry," the Treasury Department said in its announcement. One of those banks was Promsvyazbank (PSB), Russia's "eighth largest financial institution." 

Other Western countries and organizations, including Australia, Canada, the European Union, and the UK, soon followed suit and imposed their own sanctions on PSB. 

PSB and the Pegas Tanker

Founded in 1995, PSB began as a private bank. However, the Russian government took control of it in 2018 "and repurposed it to finance the defense industry and service large defense contracts as part of a scheme to assist the government in avoiding new sanctions," the Treasury Department explained in its Feb. 22 announcement. 

In sanctioning PSB, the US included subsidiaries of the bank, one of which is PSB Lizing 000. That subsidiary owned two crude oil tankers: the Linda and the Pegas. Both tankers were named in Washington's list of new Russian sanctions. 

It was the Pegas that Greece seized on Apr. 15—and it was flying the Russian flag at the time, while it had a crew of 19 Russians.

The ship was carrying Iranian oil, and some confusion followed as to why it had been seized. Greek authorities first said that it was because of the ship itself—i.e., subject to US and EU sanctions—rather than its cargo.

However, "days later," The Maritime Executive reported, "Greek authorities reportedly released the vessel believing that they did not have the authority to detain it."

Yet the ship had mechanical problems, which is what brought it into Greek waters in the first place. On Apr. 18, Greek authorities issued a maritime detention order—in effect, maintaining control of the ship and its cargo, but using a different rationale.

It later emerged that a week after the Pegas had been sanctioned by the US, its name was changed to the Lana. And on May 1, the ship was reflagged—no longer a Russian ship, but an Iranian vessel! 

Last Thursday, the US took custody of the Iranian oil the Pegas/Lana was carrying. The following day, Iran seized the two Greek-flagged tankers. They, and their crews, remain in Iranian custody.