(Bloomberg) -- Gibraltar’s decision to release Iran’s Grace 1 oil tanker on Thursday sparked the ire of the U.S., even as it signaled a possible thawing in relations between the Persian Gulf state and the U.K.
While a court in the British territory ruled that the ship is free to sail -- following weeks of detention on suspicion of violating European sanctions -- the U.S. may yet seek to block this from happening. The Trump administration said it is gravely disappointed by the vessel’s release and threatened sanctions against ports, banks and anyone else who does business with the ship or its crew. Here’s the latest on what might happen to the Grace 1.
What is the status of the ship and its crew?
The Grace 1 is still anchored in Gibraltar, where it has been since July 4, vessel-tracking data compiled by Bloomberg show. Four crew members -- the captain, chief officer and two second mates -- have been released. The captain, from India, has no intention of going back aboard the ship, his lawyer said Thursday. Most of the remaining 25 to 30 members of the crew are still aboard, he said.
Is it still carrying Iranian crude?
It appears to be. The vessel was detained last month holding 2.1 million barrels of crude from Iran, according to the Gibraltar government. It is still fully laden with a cargo size of that amount, tanker-tracking data compiled by Bloomberg show.
A Gibraltar government statement Friday said there was clear evidence the ship was originally bound for Syria and that Iran had provided assurance that this was no longer the case. “The evidence is clear and the facts speak louder than the self-serving political statements we are hearing today,” it said, without specifying which comments it referred to.
Why hasn’t the ship left Gibraltar yet?
Both Iran and Gibraltar have said that preparations are being made to enable the ship to depart the port. That may run into several roadblocks though -- U.S. Secretary of State Mike Pompeo tweeted that any mariners who assist the vessel may jeopardize their ability to enter the U.S. in the future.
Can the U.S. keep the vessel detained in Gibraltar?
The U.S. could bring new proceedings to a court in Gibraltar under a mutual legal assistance agreement, Gibraltar Chief Minister Fabian Picardo said in an interview with the BBC on Friday. That could see the case return to a court in Gibraltar, which may result in the ship being stuck there again. In a statement Thursday, the chief minister said the U.S. had requested that such a procedure begin, though it wasn’t clear if that had happened yet.
What sanctions is the Grace 1 in danger of violating?
It’s not immediately clear. The ship was originally detained because it was alleged that it was carrying crude to the Baniyas refinery, an entity that is listed in EU sanctions on Syria. The fact the crude it was carrying came from Iran was irrelevant as far as that original arrest was concerned.
Now that the Gibraltar government has accepted Iran’s assurances that the ship will not go to Syria, there are no grounds to detain it under the EU sanctions. Unlike the U.S., the European Union hasn’t reinstated sanctions aimed at Iran’s oil exports, so it’s difficult to see what grounds in European law there would be for rearresting the vessel based on the origin of its cargo.
What about U.S. sanctions?
In March, the U.S. issued an advisory to the maritime oil-shipping community on the subject of sanctions risks related to cargoes involving Iran and Syria. It advised that non-U.S. persons “may be subject to sanctions for knowingly conducting significant transactions for, or knowingly providing significant support to, certain Iran-related persons” on the U.S. sanctions list. This list might include the ultimate owners of the Grace 1, though the sanctions don’t appear to include the arrest of the vessel itself. While the ship is currently Iran-flagged, it remains something of a mystery who actually owns the tanker.
Why is the U.S. so concerned?
The U.S. has a policy of seeking to reduce Iranian oil exports to zero. As a result, a key pillar of President Trump’s foreign policy depends on preventing ships like the Grace 1 sailing from Iran to possible buyer destinations like Syria. However, despite U.S. sanctions on Iran, the Persian Gulf state continues to export some oil, including to China. A U.S. State Department spokeswoman said the vessel was assisting the Islamic Revolutionary Guard Corps, which the U.S. named as a terrorist organization in April.
What about the tanker seized by Iran?
Shortly after the Grace 1 was detained, Iran seized a U.K.-flagged vessel, the Stena Impero, which it continues to hold. The U.K. Foreign and Commonwealth Office said in a statement Thursday that there was no link between Iran’s actions threatening shipping in the Strait of Hormuz and Gibraltar’s release of the Grace 1. Gibraltar was enforcing EU sanctions, while Iran’s actions were illegal, it said. There was no update on the status of the Stena Impero, a spokesman for the vessel’s owners and managers said Thursday.
(Updates with Gibraltar statement in fifth paragraph, comment from U.S. State Department spokeswoman in penultimate paragraph.)
--With assistance from Alex Morales and Nick Wadhams.
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