Friday, March 21, 2025
President Trump is considering a plan to stop and search Iranian oil tankers at sea under an international accord aimed at countering the spread of weapons of mass destruction, the Reuters news agency reports, quoting unnamed sources.
Reuters spoke only of a scheme to stop and search tankers, not to seize any Iranian oil. That would delay deliveries and possibly make buyers more leery about Iranian oil. But it wouldn’t block sales outright. Trump has vowed to restore his “maximum pressure” campaign to isolate Iran from the global economy and drive its oil exports to zero, in order to stop the country from obtaining a nuclear weapon although his treasury secretary has said the goal is to cut Iran’s oil exports to less than 100,000 barrels a day, not zero.
Trump hit Iran with three batches of fresh sanctions in the first weeks of his second-term, targeting companies and the so called “shadow fleet” that carries Iranian crude to its buyers, almost entirely in China. However, those new sanctions are no different from the sanctions issued every few weeks by the Biden Administration.
They hit individuals and business firms that operate as fronts for Iran. They freeze any assets those men or firms have in the US. But people and firms who deal in sanctions violations generally don’t do any business in the US and so are rarely harmed.
The Trump and Biden sanctions also have hit many individual tankers and those sanctions have had the effect of narrowing the number of tankers that can carry Iranian crude to buyers. Trump officials are now looking at ways for allied countries to stop and inspect ships sailing through critical chokepoints such as the Malacca Strait in Asia and other sea lanes, according to six sources, Reuters said. That would delay delivery of crude to refiners.
It could also expose parties involved in facilitating the trade to reputational damage and sanctions, the sources said. However, the owners of tankers carrying sanctioned oil from Iran, Russia and Venezuela have never shown any concern about “reputation” in the past. “You don’t have to sink ships or arrest people to have that chilling effect that this is just not worth the risk,” one of the sources said. “The delay in delivery … instills uncertainty in that illicit trade network.”
The administration was examining whether inspections at sea could be conducted under the auspices of the Proliferation Security Initiative (PSI) launched in 2003, which aims to prevent trafficking in materials for “weapons of mass destruction” chemical, biological and nuclear weapons. The argument would be that Iran’s oil revenues are used to fund a nuclear weapons program.
The US drove the PSI plan, which has been signed by over 100 governments. This mechanism could enable foreign governments to tar[1]get Iran’s oil shipments at Washington’s request, one of the sources said, effectively delaying deliveries and hitting supply chains Tehran relies upon for revenue.
The Reuters report spoke only of stopping and searching ships not of seizing the crude aboard them.
The point seemed to be harassment and delaying deliveries. The Reuters report also spoke of stopping Iranian tankers. None of the ships in the “shadow fleet” fly the Iranian flag. They all are flagged in other countries, such as Panama and the Marshall Islands.
It isn’t clear if Reuters made an error in speaking of just Iranian tankers. It was also unclear if Washington had yet approached any signatories to the Proliferation Security Initiative to test their willingness to agree to allow inspections of ships. John Bolton, who was the US lead negotiator for the initiative when it was formed, told Reuters: “It would be fully justified” to use the initiative to slow down Iran oil exports.
He noted that selling oil was “obviously critical to raise revenue for the government of Iran to conduct both its proliferation activities and support for terrorism.” Previous attempts to seize Iranian oil cargoes have triggered retaliation by Iran.
The US seized at least two cargoes of Iranian oil in 2023, under Biden. This prompted Iran to seize foreign ships. The current low oil price gives Trump more options to block Iranian oil flows, from sanctions on tanker companies to seizing ships, according to Ben Cahill, an energy analyst at the Center for Energy and Environmental Systems at the University of Texas. “I think if prices stay below $75 a barrel, the White House has more latitude to look at sanctions that would affect supply from Iran and other countries.
It would be much harder to do this in a $92 per barrel environment,” Cahill told Reuters. The average price for an OPEC barrel on March 5, the day before the Reuters story was released, was $72.40. Aggressive US action could cut Iran’s exports by some 750,000 barrels per day in the short term, Cahill said. But the longer the sanctions are in place, the less effective they are as Iran and buyers figure out ways around them.
A speedy resumption of oil exports from Iraq’s semi-autonomous Kurdistan region would help offset any fall in Iranian exports. Reuters previously reported that the White House is piling pressure on Iraq to allow Kurdish oil exports to resume or face sanctions.
Despite US sanctions in recent years, Tehran’s oil exports brought in $53 billion in 2023 and $54 billion a year earlier, largely in trades with China, according to the US Energy Information Administration.
European countries have spoken about inspections of ships transporting Russian oil suspected of not having valid insurance, but little action has been taken and none mooted for vessels hauling Iranian oil.
