US 'deeply concerned' about China ships carrying Iran oil

October 17, 2019 00:00:00

A general view of Abadan oil refinery in southwest Iran, is pictured from Iraqi side of Shatt al-Arab in Al-Faw south of Basra — Reuters

WASHINGTON, Oct 16 (Reuters): The White House is warning Chinese shipping companies against turning off their ships' transponders to hide Iranian oil shipments in violation of US sanctions, two senior administration officials said.

"We've been messaging very heavily to the shipping companies, you don't want to do this, it's not worth it," said one official, who spoke to Reuters on condition of anonymity. "It's incredibly dangerous and irresponsible behaviour."

China is the largest remaining buyer of Iranian oil after US President Donald Trump reimposed sanctions on Tehran's main export. Trump tightened US sanctions in May in an effort to drive Iran's oil sales to zero.

The sanctions are aimed at quashing Iran's nuclear ambitions, ballistic missile programme and influence in Syria, Iraq and other countries. Its oil exports have fallen to less than 400,000 barrels per day from about 2.5 million bpd.

On Sept. 25, the US imposed sanctions on five Chinese individuals and two Chinese COSCO Shipping Corp subsidiaries, saying they had shipped Iranian crude oil in violation of the sanctions.

Days later, 14 COSCO Shipping Tanker (Dalian) vessels, about one-third of its fleet, stopped sending location data from their automatic identification system (AIS) between Sept. 30 and Oct. 7, ship tracking data on Refinitiv Eikon showed.

The administration said on Tuesday it had independently confirmed that COSCO had been shutting off AIS on its ships.

All but three of the ships have become traceable since Reuters' report ran on Oct. 9. The latest locations for Very Large Crude Carriers (VLCC) Yuan Shan Hu and Cosglad Lake were still unavailable between Oct. 8 and Oct. 16, while Aframax-sized tanker Yang Mei Hu has been untraceable since Oct. 11, data showed.

COSCO Shipping Tanker (Dalian) said in an e-mail statement that none of its vessels had turned off their AIS controllers or stopped transmitting AIS signals.

"Dalian Tanker will continue to adhere to applicable laws and regulations in the conduct of its business operations," the company said.

The International Maritime Organisation requires vessels to use transponders for safety and transparency. Crews can turn off the devices if there is a danger of piracy or similar hazards. But transponders are often shut off to conceal a ship's location during illicit activities.