US Uses Iran's Smuggling Tactics to Sneak Oil Out of the Persian Gulf

The United States military has overseen a number of clandestine ship-to-ship oil transfers to keep energy exports flowing from the Persian Gulf, using aerial and waterborne drones as well as helicopters to guide convoys to waiting tankers.

The operation on the edge of the Strait of Hormuz uses a shuttle technique that Iran has long used to circumvent sanctions. Two specific locations where the oil is being moved were identified by 11 people familiar with the operation – one off the coast of Fujairah in the United Arab Emirates and the other off the Omani port of Sohar. It began in early May, and at least 92 ships have been involved in the moves, according to shipping data and satellite images reviewed by Reuters.

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As recently as June 11, 17 pairs of ships were seen making simultaneous oil transfers at the two sites, according to satellite images reviewed by Reuters.

According to four sources, including a former US official with knowledge of the attack, the mission involved an Apache helicopter shot down by Iran on June 9, prompting retaliatory bombing by the US. Using satellite imagery, Reuters counted six pairs of tankers clustered in a small area off the port of Sohar on the day the Apache was shot down.

Reuters could not confirm what role Apache played in the operation. In response to questions from Reuters, a US defense official said no Central Command units were involved in the ship-to-ship oil transfer operation. Both crew members were rescued by a drone, US officials said.

The extent of the ship-to-ship transfers, how they work, and Apache’s role in the operation have not been previously reported. The White House referred questions to Centcom. The Iranian government did not respond to requests for comment on the transfer operation.

The two locations where these transfers are taking place, in the Gulf of Oman near the exit of the Strait of Hormuz, are close to the boundaries drawn by the Persian Gulf Authority, the new Iranian body set up to manage the Strait of Hormuz. Ships that do not comply with Iranian orders are threatened with drone and missile attack by the Islamic Revolutionary Guard Corps.

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The port of Fujairah itself came under repeated Iranian fire during this US-led operation. Last weekend, an “unknown projectile” hit a tanker off the coast of Oman, according to British maritime risk management group Vanguard. Vanguard said in a statement that the crew was safe and that the impact caused leakage of cargo but no environmental damage. She did not specify whether the tanker was involved in the ship-to-ship transfer.

Iran responded to the American-Israeli war by effectively closing the Strait of Hormuz, through which roughly a fifth of global oil consumption normally passes. This caused the largest global power outage in history and fueled inflation around the world.

The ship-to-ship transfers, while risky and inefficient, appear to be part of the Trump administration’s effort to help restore normal oil flows from the Persian Gulf. US President Donald Trump said the Strait of Hormuz would reopen on Friday under a framework peace deal with Iran announced this week, but details remained unclear. Reuters could not determine whether the reported deal affected oil transfers.

A Reuters investigation published on May 20 found that Iran has put in place its own system for putting ships through the opposite side of the strait, involving island checkpoints, diplomatic agreements and sometimes fees.

Successive departures and waypoints

US transfer operations are fully controlled by the US military, eight sources said, including a private security contractor involved in the transfers.

The tankers must arrive at the rendezvous point before reaching the strait and then stagger their departures so that they are about 3,000 to 4,000 meters apart, according to one of the sources and satellite images. Their transponders are off and their lights are dimmed, according to four sources.

A series of waypoints allows the US military to track the progress of designated tankers, but the Americans are “obviously watching you the whole time,” one of the sources said.

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As they pass through the strait, just beyond the zone Iran has demarcated as under its control, the tankers pull alongside receiving ships, which are Very Large Crude Carriers, or VLCCs, to begin transporting the oil. They take 24 to 40 hours to complete. The empty tankers then shuttle back through the strait and the newly loaded VLCCs sail on.

What makes this ship-to-ship operation possible is that there are several carriers willing to sail their vessels through the strait to deliver oil to waiting tankers, despite the Iranian blockade.

But the operation is risky. “You just don’t know when Iran might decide to start using drones or even gunboats to stop even these ships from passing through the strait,” said Noam Raydan, a senior fellow at the Washington Institute for Maritime Risk, who reviewed the Reuters findings.

The ship-to-ship technique has been used by Iran for years to circumvent sanctions because it disguises the source of the oil. The Iranians usually operate one pair of ships at a time, both to avoid detection and because their pre-war exports were relatively small. The US-led operation, which includes bulk transfers, gives Gulf producers better protection from Iranian retaliation to move crude, condensate and oil products to international buyers.

Reuters reviewed more than a dozen satellite images taken between May 2 and June 11 that show ship-to-ship transfers involving Gulf state tanker fleets and internationally operated vessels receiving oil. LSEG and Kpler shipping data reviewed by Reuters showed repeated encounters between tankers operating in the area during the same period.

Based on the images, Reuters calculated that at least 90 million barrels of oil and oil products may have moved through the offshore network since the beginning of May. Volumes, based on the carrying capacity of tankers, are still small compared to the pre-war average of about 20 million barrels that passed through the strait daily.

“As the old rules weaken, it is ironic that the United States is now taking a page out of the playbook of China, Russia, North Korea and even Iran, whose so-called ‘dark fleets’ have pioneered these techniques precisely to avoid US and UN sanctions,” Michael Froman, president of the Council on Foreign Relations, wrote in a note Friday. He was referring to the practice of sending ships through the strait without transponders, which Trump mentioned in comments on June 10 after the Apache was shot down.

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Six sources with direct knowledge of the operation said the U.S. supported the vessels involved with a combination of aerial surveillance, compliance screening and monitoring rather than naval escort. Reuters found no indication that US military personnel were directly involved in the transfers themselves.

Across the strait

On the receiving end of the operation, international tanker operators dominate, according to a review of shipping records. One of them, the Greek company Dynacom Tankers Management, has mentioned its efforts to find creative ways to transport oil through the strait since the start of the war on February 28.

“Freedom of navigation is essential and nobody can impose tolls or any other burden,” said George Procopiou, founder of Dynacom, at the Capital Link shipping conference in Athens on June 1. “We are here to serve, and Greece has a tradition of breaking through blockades since ancient times,” he said. “I don’t want to go into more details, but I believe the hints are enough to understand what I mean.

Dynacom did not immediately respond to a request for comment on the US operation.

But another maritime source said the new system poses its own risks for their industry.

“There is a lack of reliable data,” a maritime security source said. The transponders used to communicate the ships’ positions are switched off and “companies are not reporting through the usual reporting centres”. That risks collisions between ships traveling at night with their lights off at speeds that don’t allow for easy maneuvering, according to several shipping industry officials.

Four sources familiar with the arrangements said operators seeking access to the system must go through a compliance review process before being allocated transit windows. This process includes the transfer of information to the Office of Maritime Cooperation and the US Navy’s maritime transport instructions in Bahrain.

Two preliminary compliance documents reviewed by Reuters required operators to provide a complete geospatial tracking history, full disclosure of beneficial ownership, cargo documentation and a willingness to allow cargo testing.

If approved, participating vessels are assigned transit windows and remain in contact with the US military office in Bahrain throughout the voyage.

According to shipping records reviewed by Reuters, exports from the Emirates make up a substantial part of the transfer to the US. The United Arab Emirates’ state oil company ADNOC is among the most active participants in US-led transfers, six sources said.

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The Kuwait Oil Tanker Company was also active in transfers. About 2.3 million barrels of oil were pumped from one of its ships off the coast of Sohar on June 6, one of the busiest days for movements, according to data from TankerTrackers.com. The receiving ship Sea Ruby was spotted five days later off the southwest coast of India, bound for China where it was expected to unload its cargo.

The UAE government, ADNOC and Kuwait Oil Tanker Company did not respond to requests for comment.

“I don’t see a permanent solution to all of this,” Raydan said. “This is a temporary solution in exceptional times.”