The US took the first step to counter Iran’s sanctions evasion by putting pressure on Panama to ban Iranian vessels sanctioned by Washington from using its flag.

During a trip to Panama on Wednesday, Abram Paley, Deputy Special Envoy in the US Office of the Special Envoy for Iran, said the measure aims to prevent ships from being used for illegal actions such as supporting groups designated as Iranian terrorist organizations with oil sales.

Paley said in a statement that the US is working to expand enforcement of the sanctions as part of a larger diplomatic outreach campaign.

“Iran and actors related to Iran are trying to evade sanctions here in Panama,” he said. “They’re trying to abuse Panama’s flag registry.”

In January 2023, Panama’s maritime authority said it had withdrawn its flag from 136 ships linked to Iran’s state oil company in the last four years.

According to the Authority, the country has registered 8,540 ships, some 16 percent of the global fleet.

The small Central American nation is the world leader in offering flags of convenience, which allow shipping companies to register their vessels in countries to which they have no link — for a fee and freedom from oversight.

Experts say that rogue ship owners use the flag of convenience to bypass environmental regulations and labor laws and even conceal entirely who owns a specific ship.

“We expect that the Panamanian government will continue to work with us based on their domestic laws and international obligations,” said Paley.

Washington suspects Iran is involved in the use of shadow tankers to transfer oil or petroleum products and to finance its loyal groups that Washington considers terrorist.

According to Paley, at least six ships flying the Panamanian flag have violated these sanctions since January.

Panama’s Deputy Foreign Minister Vladimir Franco said on social media platform X that he had met with Paley for talks on “maritime cooperation” between the two countries.

Iran has been under debilitating US sanctions since Washington’s 2018 withdrawal from a landmark nuclear deal.

Washington’s new measure comes few days after Iranian Oil Minister Javad Owji said Tehran’s oil sales were not affected by sanctions even if Donald Trump wins the US presidential elections in November.

Last month, Bloomberg said the Biden administration wants to tighten the screws on Iran’s oil sales to neutralize its support for militants in the Middle East.

It said the White House aims to strengthen enforcement of existing sanctions as the regional crisis worsens, quoting people familiar with the situation, although it’s aware missteps risk disrupting global oil markets.

Meanwhile, Iran and Venezuela are trying to patch together an oil alliance that began to fray last year, according to six people familiar with the matter, after the South American country fell behind on oil swaps that had boosted crude exports and helped stem domestic fuel shortages.

The expected April return of US sanctions on Venezuela’s oil industry will make the Iran alliance critical to keeping its lagging energy sector afloat.

Washington last year temporarily relaxed sanctions on Venezuela’s promise to allow a competitive presidential election, something that has not happened.

The situation is growing dire. A review of shipping data and documents from Venezuela’s oil company PDVSA show that Venezuela fell behind in payments to Iran, a shortfall that worsened when the US began to issue licenses in late 2022.

Those authorizations prompted the state firm to reassign cargoes originally planned for Iran to cash-paying customers.

To salvage the partnership, Venezuela is rushing to fulfill terms of a three-year-old alliance that has involved hundreds of millions of dollars in oil swaps and contracts. The nation is trying to settle pending debt by accelerating deliveries of heavy crude and fuel cargoes to Iran.

Venezuela also is striving to renegotiate dozens of unfinished projects from agriculture to car manufacturing before Iranian President Ebrahim Raisi visits Caracas in the coming months, the people said.

Two prior Iranian delegations that traveled to Venezuela since mid-2023 left without significant agreements announced, on the promise that Venezuela would catch up on payments.

“Despite encountering challenges, particularly in terms of payments by Venezuela, both nations remain resolute in their commitment to fortify their relationship and enhance their energy partnership in the face of American pressure,” said a senior Iranian official.

Venezuela’s oil minister Pedro Tellechea in February acknowledged the tattered relationship, saying PDVSA would conduct its own maintenance for refineries and petrochemical plants this year, something that was a key part of the 20-year deal with Iran.

“We are completing the maintenance programs with our workers,” he said at a briefing at a fuel distribution plant in central Carabobo state.

Source » aawsat