On Sunday, January 24, the government of Indonesia announced that its coast guard had seized two tankers within its territorial waters, one of which was sailing under the flag of the Islamic Republic of Iran.
Tehran responded the following day by demanding answers and contradicting Jakarta’s explanation of the incident, and it did so without any apparent acknowledgment of the irony.
Earlier in the month, Iran’s Islamic Revolutionary Guard Corps (IRGC) had seized a South Korea-flagged tanker in the Strait of Hormuz, leading to numerous questions about the Iranian regime’s intentions and the credibility of its initial explanation.
The IRGC’s action came just ahead of a pre-planned visit from a South Korean delegation that was expected to discuss the possible release of seven billion dollars in Iranian earnings from oil sales, which remained frozen in accordance with U.S. sanctions.
Many observers quickly assumed that the ship’s seizure was intended to provide Tehran with added leverage in this discussion. And although the Islamic Republic officially denied this at first by stating that the tanker had violated the law by polluting the waterway, the cover-story was soon abandoned by some officials and state media outlets.
The regime’s false claims, in that case, may have further damaged its credibility regarding the more recent case. But that has not stopped Tehran from trying to promote its own narrative.
However, that narrative has been comparatively vague, with Foreign Ministry Spokesperson Saied Khatibzadeh saying only that the seizure of the Iranian ship was a “technical issue” and that it would be quickly resolved.
“Our Ports Organization and the shipowner company are looking to find the cause of the issue and resolve it,” he said in a televised news conference on Monday even those Jakarta had already explained that the tanker was “caught red-handed” illegally transferring oil from one ship to another.
Ironically, the incident near Indonesia proved to be reminiscent of Tehran’s apparently false allegation of pollution by the South Korean ship. Indonesian coast guard spokesman Wisnu Pramandita explained that the nature of the rendezvous between the Iranian-flagged ship and its Panamanian-flagged counterpart was immediately obvious because there was oil spilling into the waters around them.
These sorts of ship-to-ship transfers are a common feature of Iran’s strategy for evading U.S. sanctions, steadily ramped up throughout the latter half of the Trump administration and caused Iran’s oil exports to decline from more than two million barrels per day to merely a few hundred thousand.
The precise number has been difficult to pin down, largely because of the uncertain volume and effectiveness of the ship-to-ship transfers, which allow middlemen to purchase Iranian oil at a discount and then sell it to customers who may or may not be aware of its origin and the associated risk of penalties from the U.S. Treasury.
Unresolved questions about these smuggling operations are arguably beneficial to Iran in terms of state propaganda. Since the international community is aware that illicit transfers are taking place, the Iranian regime enjoys some degree of credibility when claiming that it has effectively weathered the sanctions and kept itself in a position to defy Western demands for some time to come.
Iran’s Oil Minister Bijan Zanganeh made precisely this claim last week when he said that the Islamic Republic had achieved record highs specifically in the sale of refined petroleum products, which can be sold off piecemeal to small industries and private buyers.
Zanganeh went on to say that by keeping its head above water in this fashion, the Iranian oil industry was preparing to “return to the market stronger than before” in the event that sanctions are removed.
By portraying the U.S. sanctions as ineffective, he and other officials are evidently hoping to convince the new White House to take a different tack and remove sanctions as a stepping stone toward negotiations.
But although President Joe Biden has indicated that he is open to returning to the nuclear deal that his predecessor pulled out of before restoring and expanding sanctions, he has also ruled out the possibility of the U.S. taking the first step toward restoring the former status quo.
If Zanganeh’s claims about Iranian impervious had any chances of changing Biden’s mind on this point, those chances most likely diminished in the wake of both maritime incidents.
Both can easily be interpreted as signs of Iran’s economic weakness and mounting desperation for cash infusions that will help the regime to stave off both compromise and collapse for a little while longer.
In the first place, Tehran took on the considerable risk of international blowback by seizing a South Korean tanker and providing a highly questionable explanation for it.
And it did so in exchange for a comparatively little promise of reward. So far, South Korea has shown no sign of being willing to release Iran’s seven billion dollars or risk U.S. sanctions enforcement in order to secure the release of its ship or sailors.
Indonesia’s seizure of the Iranian-flagged vessel does not reveal anything new about the Islamic Republic, but it does serve as a reminder of the lengths to which the regime must go in order to circumvent Iranian sanctions.
As more information reaches the international press about the illegal activity that was interrupted, the incident may also reveal the extent of Iran’s financial losses from these sorts of dealings.
That in turn may reinforce perceptions of an Iranian economy on the brink of collapse, with the U.S. and its allies holding most of the leverage in future talks over matters including but not limited to the Iranian nuclear program.