Russia Involved in Plot To Help Iran Bust US Oil Sanctions

Sanctioned Russian ships ferrying illicit Iranian crude oil in new sanctions-busting scheme

Russian president Vladimir Putin and Iranian supreme leader Ali Khamenei (Alexei Druzhinin/AFP via Getty Images)
March 3, 2022

Sanctioned Russian tankers are carrying illicit Iranian oil, providing a fresh financial lifeline for Tehran and highlighting significant gaps in the Biden administration’s enforcement of sanctions.

The two tankers, named the Pegas and Linda, were recently sanctioned as part of U.S. efforts to isolate Russian businesses over the Ukrainian invasion. It has now become apparent that the two ships have been ferrying illicit Iranian crude oil in recent months, a move experts see as a scheme to evade U.S. sanctions and signal an increase in Tehran-Moscow relations. Satellite imagery and detailed information on both vessels were provided to the Washington Free Beacon by United Against Nuclear Iran (UANI), a watchdog group that closely tracks Tehran’s illicit oil trade.

Russia’s involvement in the shipment of sanctioned Iranian crude oil highlights the growing ties between both regimes, particularly as Moscow faces international isolation for its unprovoked invasion of Ukraine. As Russia is choked off from Western financial institutions, it is likely to further bolster Tehran’s illicit sanctions-busting schemes to help it offset international sanctions.

Russia, UANI said in a Thursday statement on the situation, "has joined its ally China in participating in Iranian sanctions-busting schemes to smuggle crude oil and gas." Russia, China, and Iran are now leading the charge to bust U.S. oil sanctions. The anti-U.S. alliance between these rogue nations is generating scrutiny amid Russia’s invasion of Ukraine and efforts by the Biden administration to ink a revamped version of the 2015 nuclear deal with Iran—an agreement that will provide the hardline regime in Tehran with billions of dollars in cash windfalls. Russia has emerged as the United States' top interlocutor in these talks, drawing outrage from many hawks in Congress who want to see Moscow completely isolated.

"Iran has continuously worked to evade sanctions on its oil exports. Given that Russia and Iran have openly expressed their desire to expand cooperation, it is not surprising that Iran has found a partner in Russia to help it do this," Claire Jungman, UANI’s chief of staff, told the Free Beacon. "Through the use of these now-sanctioned Russian tankers, Iran continues to generate billions in revenue to fund its malign activity. As Russia becomes more isolated, we might see these two countries working even closer together as they work to evade sanctions and generate revenue."

The tanker Linda first loaded Iranian crude oil on Jan. 30, via a ship-to-ship transfer from the Emerald, another flagged tanker that was accused of leaking Iranian oil off of Israel’s coast, according to the satellite imagery reviewed by the Free Beacon. The Linda is now heading for Malaysia with the Iranian oil in tow. Malaysia indicated on Tuesday that it will block the ship entry as part of an effort to penalize Russia for its war in Ukraine. There is also evidence the Linda may have changed its name to Inda in a bid to avoid detection in international databases.

The second tanker, the Pegas, took on Iranian oil at the end of August 2021, according to UANI’s tracking information. The ship attempted to transfer this oil to the Turkish port of Marmara on Jan. 18, but was rejected. UANI had petitioned the terminal’s operator to reject the transfer, citing gross sanctions violations. While the group did not get a response, it appears these warnings were heeded.

The Pegas departed the Marmara terminal on Jan. 24 still carrying Iranian crude oil. Since that time, the vessel has been moored at Marmara Ereglisi Quarantine Anchorage. UANI again petitioned the Marmara terminal operators for information about the ship and its payload on Jan. 26, but did not receive a response.

Watchdog groups like UANI see the Iran-Russia alliance as a chief source of concern amid global destabilizing activities by both nations. "Russia and Iran have openly expressed their desire to expand cooperation, especially in the arms and energy sectors," the group said in its Thursday statement.

When the international arms embargo on Iran expired in October 2020, Russia and China were the first to express an interest in striking new arms deals with Iran.

In a sign of these growing ties, Iran’s ambassador to Russia met Thursday with Russian president Vladimir Putin's special envoy to Afghanistan "to discuss bilateral ties and latest regional developments," according to a report in Iran’s state-controlled press.

China is the largest importer of illicit Iranian crude oil. Illicit Iranian oil shipments jumped by 40 percent in 2021, with China, the United Arab Emirates, Syria, Venezuela, and Russia being the largest importers, the Free Beacon first reported in January.

With Russia facing its own set of crushing sanctions, it can leverage its alliance with Iran to skirt international measures and strengthen the anti-U.S. axis of nations.

"As Moscow becomes more isolated," UANI said, "it may assess that it is in its interest to further strengthen a U.S. adversary both economically and militarily."