U.S. Considers Cutting Iran’s Oil Flows By Inspecting Tankers at Sea

By Tsvetana Paraskova

The Trump Administration is considering whether U.S. and allies could halt Iranian oil tankers at sea for inspection under an international treaty to prevent trafficking of weapons of mass destruction, several sources with knowledge of the plans have told Reuters.

In his first two weeks in office, U.S. President Donald Trump restored the “maximum pressure” campaign on Iran, to deny Iran all paths to a nuclear weapon, and countering Iran’s malign influence abroad.

The pressure campaign on Iran aims to drive its oil exports to zero. Last week, the U.S. Administration imposed additional sanctions on the Iranian shadow fleet, designating more than 30 people and vessels for selling and transporting Iranian petroleum-related products.

In line with the “maximum pressure” campaign on Iran, U.S. Administration officials are now mulling over a plan whether U.S. allies could stop and inspect Iranian oil tankers in chokepoints including the Malacca Strait in Asia, under the 2003 Proliferation Security Initiative, according to Reuters’s sources.

If such inspections were to take place, they would delay deliveries of Iran’s oil to its customers, the biggest being China, which gets about 90% of all the oil Iran continues to export despite the U.S. sanctions that have been in place since President Trump’s first term in office in 2018.

“You don’t have to sink ships or arrest people to have that chilling effect that this is just not worth the risk,” one of the sources told Reuters.

According to John Bolton, who was the U.S. lead negotiator for the Proliferation Security Initiative, “It would be fully justified” to use it to slow or delay Iranian oil exports.

Iran’s oil sales are “obviously critical to raise revenue for the government of Iran to conduct both its proliferation activities and support for terrorism,” Bolton told Reuters.

The U.S. sanctions from 2018 reduced Iran’s oil exports, but more than 1 million barrels per day (bpd) continue to be shipped – via shadow fleet tankers and opaque oil trading networks, mostly to China.

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.