Illegal Iranian Oil Shipments to China Skyrocketed in 2021

Iranian crude exports jumped 40 percent in total as Biden admin shuns sanctions enforcement

Then-Iranian foreign minister Mohammad Javad Zarif and Chinese foreign minister Wang Yi in 2019 / Getty Images
January 7, 2022

Illicit Iranian oil shipments jumped by 40 percent in 2021, with China and Syria the top importers of this heavily sanctioned crude, according to figures published by a watchdog group that highlight the Biden administration's lax enforcement of U.S. sanctions.

From 2020 to 2021—when the Biden administration began negotiations with Iran surrounding a revamped nuclear deal and began to unwind sanctions on the hardline regime—Iranian oil exports increased by 123 million barrels, or 40 percent, according to United Against Nuclear Iran (UANI), which closely tracks Tehran's armada of illegal oil tankers.

China was by far the top importer, signaling a growing alliance between the two rogue regimes. Beijing took in a total of 310 million barrels of crude oil and gas condensates from January to September of last year, according to UANI. This number is larger than the total number of oil barrels sold to all other destinations in 2020 together and exceeds the same period in 2020 by nearly 100 million barrels. The United Arab Emirates, Syria, Venezuela, and Russia were the next largest importers of Iran's banned crude. All told, Iran exported 417,706,340 barrels of crude in 2021.

The steep rise in exports signals lax enforcement by the Biden administration of sanctions on Iran's oil sector, which remain in place as the United States negotiates with Tehran over a new version of the 2015 nuclear accord, experts say. These shipments also provided Iran with millions of dollars in revenue amid a massive cash crunch that has crippled the Iranian government and sparked several waves of protests across the country. This financial lifeline is likely to help fund Iran's regional terrorism enterprise, which includes support for Hamas, Hezbollah, and the Houthi rebel terrorists in Yemen.

"The 40 percent increase in Iran's oil exports is a result of the Biden administration's refusal to enforce sanctions," Claire Jungman, UANI's chief of staff, told the Washington Free Beacon. "This lack of enforcement is a form of sanctions relief and has led to an improvement in Iran's economic situation and diminished the leverage and credibility of the U.S. during negotiations."

Chart from UANI

Iran was able to increase its oil exports through a combination of subterfuge and lax sanctions enforcement. Tehran uses a so-called ghost armada of foreign-flagged vessels to avoid detection and skirt international authorities. The country's ships routinely turn off their onboard tracking devices, which is illegal, so that they do not appear on radars as they ferry the oil across international waters.

Analysts with UANI tracked a fleet of nonsanctioned foreign-flagged vessels transporting Iranian crude throughout 2021 to various destinations. The top 10 ships in this fleet accounted for around 26 percent of Iran's total oil exports in 2021, showing how lax sanctions enforcement by the United States helped Tehran's oil trade experience a boom period. A large majority of this oil was sold to China.

"The Biden administration needs to make it more difficult for Iran to export its oil," Jungman said. "To start it should sanction the individual vessels carrying Iranian oil."

UANI had several Iranian ships blacklisted by maritime authorities through a pressure campaign targeting international shipping companies.

Zanzibar Maritime Authority, for instance, based out of Tanzania, revoked 11 vessels during 2021. Det Norske Veritas G.L., an authority in Norway, went after 12 vessels for their illicit work with Iran. West of England P&I Club, a United Kingdom-based authority, revoked the insurance of 12 vessels for their dealings with Tehran.

Earlier this month, the U.S.-based American Bureau of Shipping withdrew the classification for a tanker named Elsa after UANI presented it with information about the ship's sanctioned activity in the Persian Gulf.

A State Department spokesman, speaking only on background, told the Free Beacon that it routinely "monitors the activities of the oil markets globally" and is aware of the "mentioned reports, but will not speculate on the nature of the activity."

The State Department also said it continues to engage in diplomacy with Iran as part of efforts to solidify a new nuclear deal and that any future agreement "would of course include lifting sanctions on Iranian oil exports." These sanctions remain in full effect, however, until the conclusion of these talks, the official said.

Currently, "the United States seeks to limit exports of petroleum, petroleum products, and petrochemical products from Iran, unless subject to a waiver or exception," the spokesman said.

Published under: Iran