Gulf Shipping Crisis Sees Slow Progress and Complications, but US and UK Hold Firm

Gulf Shipping Crisis Sees Slow Progress and Complications, but US and UK Hold Firm

On Friday, India’s Foreign Ministry announced that nine Indian sailors had been released from Iranian custody, following multiple seizures of commercial vessels passing through the Strait of Hormuz. All nine had been onboard the Panamanian-flagged MT Riah when it was detained by the Islamic Revolutionary Guard Corps on July 14 after departing from one of Iran’s leading regional rivals, the United Arab Emirates.

Tehran explained that incident after the fact by accusing the Riah of smuggling Iranian oil. However, this was at odds with earlier statements asserting that the ship had experienced a malfunction and issued a distress call, to which Iranian forces replied in order to provide assistance. The ship’s operator disputed this initial account, noting that no other nation had received the alleged distress call. It remains unclear whether the altered narrative was the result of the operator’s contradiction or a mere miscommunication by Iranian authorities. But the former interpretation is supported by the sequence of events relating to the seizure of a British-flagged ship less than a week later.

On July 19, the Stena Impero was surrounded by IRGC gunboats before commandos in black ski masks rappelled to the deck from a helicopter and sailed the ship to the port of Bandar Abbas. Footage of the incident was released on Iranian state media in an apparent exhibition of the Iranian regime’s naval capabilities in the vitally important Strait. This exercise in military propaganda lent additional credence to an interpretation of the incident as an act of retaliation for the July 4 seizure of a supertanker carrying Iranian oil through the Strait of Gibraltar. British Royal Marines carried out that seizure, alleging that the oil was destined for a Syrian refinery that is under sanction from the European Union.

But evidence had already emerged for the retaliatory nature of Iran’s actions before the seizure of the Impero and even before the seizure of the Riah. Soon after the British acted to enforce EU sanctions, a former IRGC commander floated the idea of capturing a British vessel in response. This position was later taken up by the IRGC itself, possibly setting the stage for the hardline paramilitary’s seizure of both ships, as well as a third that was released soon after being detained on the same day as the Impero.

The IRGC had targeted another British-flagged ship even before the seizure of the MT Riah, but its boats were warned off by a nearby British frigate that responded to the incident by inserting itself between the gunboats and the commercial vessel. But despite all this evidence of the deliberate targeting of British assets, the Islamic Republic has generally tried to maintain a cover story that provides plausible deniability in the face of accusations that it is willfully contributing to ongoing escalations in the region.

Still, as with the narrative surrounding the Riah, the story of Iran’s seizure of the Impero has changed. It was first alleged to have collided with an Iranian fishing boat, but Tehran later acknowledged there had been no collision and argued instead that there was reason to be concerned about one because the ship had been traveling in the wrong direction as it entered the Strait. The vessel’s operator, Stena Bulk, maintains that its crew was complying with all international laws and regulations at the time of the incident.

Prior to Thursday, Stena Bulk also reported that it had not been permitted by the Iranian government to contact that crew. Eighteen of the 23 men onboard are from India, whose Foreign Ministry said on Friday that three other Indian sailors from the Riah have yet to be released. This underscores the slowness of the process whereby the situation with both ships might be resolved, and it leaves open the possibility that many of the sailors on those ships could still be used for the purposes of negotiation and propaganda.

Those who remain in custody are reported to be in good health and good spirits, but in absence of direct contact with their employers or the consulates of their home nations, it is difficult to take this for granted. It is no doubt fortunate that none of the crew from either ship is a Western national, as there is significant likelihood of such persons being treated more harshly, especially at the hands of the IRGC.

In January 2016, the IRGC captured 10 sailors in the US Navy after they strayed into Iranian waters during a training exercise. Although they were released unharmed after roughly a day, they were held at gunpoint in the interim and were reportedly mocked, threatened, and heavily featured in state media broadcasts that appeared to show at least one of the sailors crying. After the negotiated resolution of that incident, the IRGC personnel involved were afforded Iran’s highest military honors, and a statue was commissioned to commemorate the event.

More recently, the danger to Western nationals has been underscored by the arrest and prosecution of persons living in or visiting the Islamic Republic while holding citizenship or permanent resident status in the United States or the European Union. One of the highest-profile such individuals, Nazanin Zaghari-Ratcliffe, is a British national who was falsely accused of spying while visiting family in April 2016 and was sentenced to five years in prison.

Her supporters are naturally concerned that the current tensions involving the July 4 and July 19 incidents have complicated her case.

Similar concerns emerged on Friday when it was reported that a British court ruled that the United Kingdom does not owe interest to the Islamic Republic in connection with a cancelled arms sale from before the 1979 Iranian Revolution. Had the UK agreed to pay that debt, it may have exceeded 25 million dollars, based on a principal reimbursement of roughly 480 million dollars for the cost of tanks that were paid for by the previous Iranian government but never delivered. That reimbursement is still technically owed to Iran, but the British courts have yet to determine whether there is a legal pathway for making the repayment while Iran remains under such extensive sanction from the United States.

The would-be repayment has been repeatedly connected to the alleged hostage-taking of Mrs. Zaghari-Ratcliffe, including by Iranian officials. The continued lack of a resolution on this matter could further complicate her case at a time when her family is already concerned that she may be facing torture and renewed pressure to issue a false confession. Her case highlights a broader Iranian strategy of using pressure on foreign nationals and on international shipping as part of an effort to elicit new concessions from Western governments. Meanwhile, the UK’s debt ruling and the government’s overall response to the tanker situation suggests that London is disinclined to respond to that pressure in the way Iran would like.

This is not to say that the UK or its allies are opposed to the concept of negotiating with Tehran in order to resolve these tensions. Quite to the contrary, both London and Washington have repeatedly underscored their interest in avoiding further escalation. Following various endorsements of unconditional negotiation by President Donald Trump, US Secretary of State Mike Pompeo expressed his own willingness to hold direct talks with the Iranians on Friday. “If that's the call, I'd happily go there,” he said when asked directly about the prospect of a sit-down.

But Pompeo also called expanded international cooperation in the effort to constrain Iran’s escalatory behaviors in the region. “Every country that has an interest in ensuring that those waterways are open and crude oil and other products can flow through the Strait of Hormuz needs to participate,” he said in reference to an emerging program dubbed Operational Sentinel, which would see various nations escorting their own commercial ships through the Strait as necessary. The British Navy has already committed to providing such escorts on a regular basis, pending the resolution of the current crisis. In this way, the UK seemed to further underscore its refusal to provide new concessions in response to Iranian pressure.

Such gestures arguably inspire confidence that British foreign policy, under the leadership of newly-elected Prime Minister Boris Johnson, will begin to trend further in the direction of the American strategy of “maximum pressure.” It has even been claimed by some fellow British lawmakers that Johnson is preparing to withdraw from the 2015 Iran nuclear deal, as Trump did last year. Tehran ceased compliance with that agreement last month, first exceeding limits on its stockpile of nuclear material and then enriching uranium beyond the levels of fissile purity allowed under the deal.

While the US withdrawal from that agreement has been characterized by some as disavowal of past negotiations, the Trump administration has always maintained that its goal is to achieve a more comprehensive agreement, and one in which the Islamic Republic agrees to alter its aggressive regional behaviors as well as halting its nuclear development. In recent months, many American officials have expressed confidence in their progress toward that goal, even as Iran lashes out with the tanker seizures and other threatening actions.

“You’ve seen their economy teetering on the verge of collapse for a while now. And when they’re backed into a corner, they’re acting out,” said White House spokesman Hogan Gidley on Friday, in response to Iran’s provocative decision to test-fire a medium-range ballistic missile in the midst of the current tensions. If the UK agrees with this assessment, it could provide further incentive to withhold repayment of the old debt and to avoid releasing the potentially lucrative Iranian oil that has been confiscated.

In absence of that release, Iran has few lifelines in its effort to keep its economy afloat. While eight importers of Iranian oil had received sanctions waivers from the US prior to May, these have all expired, and most of the former recipients have seemingly halted their purchases. Among them is India, and although this could complicate the situation of the 21 Indian sailors still in Iranian custody, it could also deepen the existing international support for American and British-led efforts to resolve the underlying crisis.

China stands out as one exception to the overwhelming compliance with US sanctions on Iranian oil, but even this exception is qualified. The world’s second largest economy allegedly imported an average of over 200,000 barrels per day of Iranian oil during June, but even this represents the lowest level since mid-2010. It is possible that there are more such imports that have appeared in official records, since dozens of tankers have reportedly turned off their transponders for extended periods of time since the sanctions were imposed, potentially allowing them to load Iranian oil clandestinely.

But as the trade publication Energy and Capital noted in reporting upon this phenomenon on Friday, doing so comes with serious risks for the ships’ operators and for the nations that decide to import via those means. “It turns out President Trump isn’t going to look the other way. This week, the U.S. placed economic sanctions on Zhuhai Zhenrong Ltd., a state-owned Chinese company, as well as its CEO for violating sanctions and buying Iranian crude.”

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