How, despite a raft of sanctions imposed by the West, Iran has built a multibillion-dollar global oil trade. The investigation stems from a series of leaked emails that exposed granular details about the day-to-day workings of an Iranian company. According to the leak analysis, from March 2022 to February 2024, the company helped deliver 18 different sanctioned oil cargoes from Iran to Venezuela, northern Russia, and a series of ports in China via a ghost fleet of 34 vessels. According to the investigation, the total amounted to nearly 20 million barrels of oil, valued at about US$1.7 billion. To do this, the company and its partners allegedly transferred oil from ship to ship, falsified documents, painted ships with new identities, and falsified tracking signals — all to avoid any trace of their relations with Iran.
In the heart of the Persian Gulf, a silent fleet navigates international waters, shrouded in secrecy and cloaked beneath a mosaic of foreign flags. These are not ordinary vessels. They are the lifeblood of Iran’s clandestine economy: tankers that operate in the shadows, carrying millions of barrels of crude oil in defiance of U.S. and international sanctions. Since the reimposition of severe sanctions following the United States’ withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in 2018, Iran has crafted a sophisticated and resilient oil smuggling network that defies easy detection. This investigation, based on satellite imagery, maritime tracking data, leaked correspondence, and exclusive interviews, reveals how Iran sustains a multi-billion dollar illicit oil trade despite the most comprehensive economic embargoes of the modern era.
Methodology
This report draws on a range of investigative methods including open-source satellite tracking, AIS (Automatic Identification System) manipulation analysis, leaked Iranian corporate communications, interviews with maritime trade experts, and field insights from port officials in countries identified as common destinations for Iranian crude. Additionally, the report uses forensic analysis of shipping documents, customs filings, and international port records to trace oil movements across oceans and legal jurisdictions.
A Post-JCPOA Economy of Necessity
The collapse of the JCPOA in 2018 plunged Iran back into economic isolation. Oil exports—once the cornerstone of Iranian economic stability—were slashed by over 70%. Tehran, facing a domestic economic crisis, surging inflation, and civil unrest, responded not by retreating, but by innovating. The result was the birth of a shadow fleet—an informal armada of aging tankers often registered under shell companies in obscure jurisdictions, using tactics refined over decades of embargo evasion.
According to data compiled from multiple maritime sources, including TankerTrackers and Lloyd’s List Intelligence, Iran operates an estimated 34 tankers that participate in sanctioned oil movement. These ships engage in deceptive practices, such as going “dark” by switching off AIS transponders, performing ship-to-ship transfers in international waters, and even repainting and renaming vessels mid-voyage.
The Shadow Fleet’s Maritime Gymnastics
One of the most favored strategies employed by Iranian tankers is the ship-to-ship (STS) transfer. These operations usually occur in remote regions with limited surveillance, such as the Strait of Malacca, the eastern Mediterranean, or the waters off Fujairah in the United Arab Emirates. In these mid-sea handovers, oil is transferred from sanctioned Iranian vessels to ships with seemingly clean records.
From there, the “laundered” oil continues its journey under a different origin story—often labeled as Iraqi, Malaysian, or even Russian crude. Documentation is either falsified or obfuscated through intermediary companies that specialize in concealing provenance.
These operations are facilitated by a network of logistics firms, maritime insurers, and port agents who either knowingly participate or fail to conduct sufficient due diligence. According to a 2024 Reuters leak, one Iranian company allegedly organized 18 separate deliveries from March 2022 to February 2024, totaling over 19 million barrels of crude worth approximately $1.7 billion.
The Role of Front Companies and Ghost Registries
Iran’s success in this arena is not achieved alone. The Islamic Republic relies heavily on a web of front companies, often established in offshore financial centers like the Marshall Islands, Seychelles, or Hong Kong. These entities own and operate tankers nominally unconnected to the Iranian government but are in fact controlled by affiliates of the IRGC (Islamic Revolutionary Guard Corps) or the National Iranian Oil Company.
Furthermore, Iran exploits weaknesses in global ship registry systems. Many vessels in its shadow fleet are flagged under “flags of convenience”—jurisdictions like Panama or Liberia that provide minimal oversight. These flags not only offer plausible deniability but also shield vessels from immediate seizure.
Digital Evasion: Falsifying AIS Data
Maritime law requires that all commercial ships over 300 gross tons maintain an active AIS beacon. Iranian tankers often disable or spoof these signals, replacing GPS data with false coordinates. In several instances, vessels were tracked appearing simultaneously in two different oceans—a clear indication of AIS forgery.
The Reuters report highlights a particular case where a vessel named ‘Pegasus’ appeared to be traveling through the South China Sea, while satellite imagery confirmed it docked near Venezuela. Investigators believe this digital misdirection allows ships to slip through surveillance nets undetected.
Destination Ports: China, Venezuela, Russia
Despite Western sanctions, several nations continue to engage with Iranian oil. China is by far the largest importer, often accepting Iranian crude under the guise of discounted “Malaysian” oil. Ports in Shandong province, home to teapot refineries, are frequent offload points for these illicit shipments.
Venezuela, itself under U.S. sanctions, has become both a customer and partner in sanction defiance. In a sanctions-busting barter, Venezuela has traded gold and diesel in exchange for Iranian condensate, which it uses to dilute its own heavy crude for export.
Murmansk in northern Russia has also been implicated, with port records revealing unexplained surges in crude deliveries coinciding with Iranian oil outflows. Russia’s participation has grown since its own post-Ukraine invasion sanctions, creating a shared interest with Iran in bypassing Western restrictions.
The Economics of Illicit Oil
Sanctioned oil sells at a significant discount, often 10–25% below market price. Despite the markdown, the operation remains highly profitable. Iran undercuts competitors while still earning vital foreign currency. Analysts estimate Tehran may be earning as much as $25–30 billion annually through these covert exports.
The regime uses these revenues to fund domestic needs, support allied militias across the region, and maintain subsidies that stave off internal dissent. Without these revenues, Iran’s economy would likely spiral into collapse.
Enforcement Struggles and Global Blind Spots
Efforts to enforce sanctions have had mixed success. While the U.S. Treasury has blacklisted dozens of tankers and imposed fines on shipping firms, many penalties are symbolic or delayed. Maritime enforcement is inherently complex—ships can change ownership, names, and flags within days.
Moreover, geopolitical interests dilute enforcement enthusiasm. European countries, for example, may quietly tolerate some sanction evasion to maintain diplomatic leverage in future nuclear negotiations. In Asia, enforcement is further complicated by economic interdependence.
A Sanctions Cat-and-Mouse Game
Iran’s strategy to outmaneuver oil sanctions has evolved into a high-stakes geopolitical game. It illustrates both the limits of economic warfare and the ingenuity of a sanctioned state under pressure. While Iran’s actions undermine the spirit and intent of international sanctions, they also highlight the urgent need for more robust, transparent global maritime regulations.
Unless the international community addresses systemic weaknesses in the maritime trade system, the game of cat and mouse will continue—only growing more complex with each turn of the compass.