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How Iran circumvents U.S. sanctions using 'ghost ships'

Ali Mohammadi/Bloomberg

Iran has already started shipping crude oil despite that U.S. oil sanctions are set to kick in, a CBC News report said Saturday.

The report suggests that the normally staid world of international trade has been beset by a flotilla of ghost ships in recent weeks, and they're weighed down by several million barrels of trouble for U.S. foreign policy.

Iran is one of the world's biggest oil suppliers, and according to official records, the country shipped about 1.8 million barrels of oil per day last month, lower compared to August.

According to the report, records of Iranian supply of crude oil are likely to plunge even more in the coming weeks, as U.S. sanctions aimed at forcing Tehran to negotiate a new nuclear agreement are set to come into force next month.

“If fully implemented and adhered to, the sanctions will cut Iran's oil exports to zero as long as the rest of the world plays along,” the report read. “But the Iranian government seems to already have found innovative ways around those efforts by moving millions of barrels of crude on the sly.

“People who monitor global tanker traffic noticed a curious new development last month, as about a dozen tankers known to be carrying Iranian oil mysteriously turned off transponders designed to track their movements via GPS.”

Ship captains must always keep their transponders on, as stipulated by the international law, however, sometimes vessels move under the radar without much of an interaction from the international community.

“Iran has lately become a hub for the tactic. And the journey of one ship, the Dino I, is a good example of how it works,” the report added.

The report further added that on Sept. 4, AIS data shows that the supertanker picked up 2 million barrels of Iranian oil at Kharg Island, a massive fill-up station in the middle of the Persian Gulf. From there, the ship made its way through the Straight of Hormuz and into the Indian Ocean, where the ship went dark from Sept. 15 onward.

It reappeared on the grid more than ten days later while passing through the busy shipping lanes near Kuala Lumpur, Malaysia, and its transponder stayed on while it paid a visit to the shipping hub of Singapore a day later, on Sept. 27.

Then it vanished again for more than a week, before reappearing off the coast of Taiwan on Oct. 5. It then went dark for another few days before checking in off the South Korean coast and delivering its cargo at the Chinese port of Dalian on Oct. 13.

Dino I is not the only such "ghost ship," as experts have called them, and the eyebrow-raising voyage seems part of a targeted attempt to evade the coming sanctions, the report continued.

"They think they'll throw people off the scent [and] they want to confuse what they're picking up," says David Adesnik, research director at Washington, D.C.-based national security think-tank the Foundation for Defense of Democracies, of what the ships are up to.

The threat of Iran being locked out of the oil market has pushed up oil prices in recent weeks. So deploying an armada of cloaked tankers allows Tehran's leaders to have their cake and eat it too by selling just as much oil as ever.

In the first 13 days of October, Tanker Trackers calculated that Iran shipped an average 2.2 million barrels per day. That's an increase of 10 per cent from what the company was seeing in September, and several hundred thousand barrels more than what's being reported in the official numbers from OPEC.

Madani's firm supplements rudimentary AIS data with other technology to fill in the gaps, and he estimates that official numbers sometimes only capture about 20 per cent of the tanker traffic at any given time. "The other 80 per cent is a cat and mouse chase involving satellite imagery," he says.

According to the report, this is not the first time that Iran has tried such chicanery. Iranian ghost ships last crisscrossed the seas to this extent between 2011 and 2015, when the previous U.S. administration had sanctions on Iranian oil before signing the nuclear deal that the current inhabitant of the White House pulled out of.