The U.S. is expected to soon begin unloading oil from an Iranian vessel it seized and is now docked off the coast of Texas, threatening to escalate a shadow tanker war with Tehran.
The Suez Rajan arrived off the coast of Galveston on May 29 and is anchored about 70 miles from the Texas port, according to transponder position data and satellite imagery.
US Department of Justice confiscated Suez Rajan under a court order with the cooperation of at least one company involved in the vessel, the FT previously reported. The ship has been under investigation since last year after claims it took on board a cargo of Iranian oil, then destined for China, from another ship near Singapore.
The Suez Rajan case is one of several recent maritime incidents involving the US and Iran and threatens to heighten tensions between the countries as Washington and its European allies renew discussions on how to engage. Iran on its nuclear activity.
The US seized the ship in April, prompting Iran to seize the ship Advantage Sweetwhich transported Kuwaiti oil for the American energy company Chevron.
The Biden administration recently stepped up patrols to respond to the seizure of Iranian ships in the Strait of Hormuz, through which about a third of all marine oil cargo passes daily.
The arrival of the Suez Rajan off the coast of Galveston likely indicates the US government has reached an agreement with the vessel’s owners and operators regarding criminal sanctions, a former Joe Biden administration official said.
The vessel is carrying about 800,000 barrels of oil, a cargo worth about $56 million.
The ship received a license from the US Treasury Department to import Iranian oil, according to the American Bureau of Shipping, which boarded the vessel to conduct a safety inspection after it arrived from Texas. The ship is expected to arrive at the Port of Galveston in the next few days. Court documents related to government seizures usually tend to be unsealed after the property is taken.
The U.S. will sell the oil, if it hasn’t already done so, with the proceeds likely to go to a fund created by Congress for American victims of state-sponsored terrorism, former U.S. officials said.
However, the government has discretion over what it can do with the funds from the sale and could choose to distribute them in other ways, such as to those opposed to the Iranian regime, a former Biden administration official said.
The Justice Department declined to comment. The Treasury Department’s Foreign Assets Control Office declined to comment.
Iran was once a major source of imported oil for the US, but that changed after the Iranian revolution in 1979 and the steady deterioration of relations over the following decades.
Imports of Iranian oil under sanctions have been extremely rare since then, with the US importing 2 million barrels in 2021, which it sold after seizing an oil tanker off the coast United Arab Emirates and 507,000 barrels in 2022, believed to be related to the seizure of two Iranian oil tankers.