As U.S. Cracks Down on Iran’s Oil Sales, It Calls Out an Ally
09 Sep 2019

On a scorching June day, a senior U.S. official arrived in the United Arab Emirates with a clear message: The Trump administration intended to tighten the screws on Iran through sanctions targeting its oil sales.

“We are going to increase our sanctions on Iran and continue our foreign policy,” Brian Hook, the White House special envoy on Iran, told CNBC from the U.A.E. capital of Abu Dhabi.

Days earlier, a significant breach in the sanctions campaign had occurred about 160 miles from where Mr. Hook met with Emirati officials to warn them about the threat Iran poses to the region. Ship-tracking data show an Iranian oil tanker delivered its cargo to a local vessel in the U.A.E. port of Fujairah in violation of U.S. sanctions imposed in May on Iran’s crude exports.

The U.A.E., along with Saudi Arabia, was an early backer of the Trump administration’s decision to withdraw from the 2015 multilateral nuclear deal and impose crippling sanctions on rival Iran. Such steps aimed to push Iran to sign a new deal with curbs on its weapons program and regional interference.

But when it comes to enforcing sanctions on Iran, U.A.E. authorities often look the other way to preserve business with Iran that helps support the economies of some of the country’s seven semiautonomous emirates.

The U.S. Treasury Undersecretary on terrorism finance, Sigal Mandelker, told reporters in Abu Dhabi on Sunday that some of Iran’s petrochemical sales were going through the U.A.E. She urged local companies, along with the U.A.E. central bank and finance ministry, to respect U.S. sanctions.

On Wednesday, the Trump administration called out Emirati companies as it added fresh sanctions on what it called an Iranian “oil for terror” exporting network.

U.S. officials said the network uses front companies that span the globe, including in the U.A.E., to sell oil worth more than $500 million this past spring alone. Penta Ocean Ship Management and Operation LLC, and Fourteen Star Shipping Management—two U.A.E.-based companies controlled by Indian businessmen—assisted Iranian oil shipments to Syria and processed millions of dollars in expenses incurred by vessels connected to those entities, the U.S. Treasury said as it designated them. The companies and their owners couldn’t be reached for comment.

Iranian traders say they have for years used the Fujairah port, which lies on the Gulf of Oman and is the main hub for oil-products shipments in the country, to re-export sanctioned crude, fuel oil and other products.

U.S. representatives this summer visited Fujairah to complain about the continued flow of illicit Iranian oil through the port, according to U.S. officials.

By Benoit Faucon and Sune Engel Rasmussen, The Wall Street Journal, 8 September 2019

Read more at The Wall Street Journal

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