The Trump administration on Thursday hit what remains of Iran’s oil “shadow fleet” with new sanctions in what a Treasury official called the “most significant blow yet” to Iran’s remaining lifeline to global oil markets.
The Treasury Department announced, according to a statement published on its website, new sanctions on individuals, networks and 17 vessels for their role in transporting Iranian crude oil, petroleum products and petrochemicals.
“Treasury is starving the tyrannical regime in Tehran of the money it uses to wage war in the region, and we will continue exposing those who enable the regime’s oil sales,” said Secretary of the Treasury Scott Bessent, according to the statement. “No enabler of Iranian sanctions evasion is safe from the full force of Treasury’s authorities.”
The shadow fleet is a network of aging tankers that moves sanctioned Iranian oil using flags of convenience, front companies and disabled tracking systems to hide its origin.
The move comes as Tehran’s oil exports face pressure from both sanctions and a U.S. naval blockade, and as Washington and Tehran trade proposals to end the war and reopen the Strait of Hormuz. For Washington, it tests whether economic pressure alone can push Iran to sign an agreement; for the Gulf, the outcome bears directly on shipping through the strait.
According to the Treasury Department, the 17 targeted vessels are responsible for transporting millions of barrels of Iranian crude oil, petroleum products and petrochemicals to markets in South and East Asia. They fly the flags of 12 jurisdictions, from Panama, the Bahamas and Hong Kong to Cameroon, Comoros, Sierra Leone and Vanuatu, and are linked to a complex network of international front companies, many registered in the Marshall Islands, Hong Kong and China, used to conceal their operations and evade U.S. sanctions.
The sanctions are part of Treasury’s economic-pressure campaign called “Operation Economic Outcast” launched in August. It’s aimed at cutting off Tehran’s sources of funding for its war activities, missile development and cyberattacks, as well as its support for Iran’s Islamic Revolutionary Guard Corps, which the United States designates as a terrorist organization.
Oil Stranded at Sea
The new sanctions come after the United States reinstated restrictions on Iranian ports on July 14, following the collapse of a memorandum of understanding between Washington and Tehran, further constraining Iran’s ability to export oil.
Reuters quoted a Treasury Department official telling reporters on a call that Iran has no more than about 20 million barrels of crude oil remaining aboard tankers outside the scope of the ban, while global oil consumption stands at roughly 100 million barrels per day.
A second Treasury official said Iran had halted the loading and unloading of crude oil tankers because of the blockade and sanctions.
“Today’s action represents the most significant blow yet to Iran’s remaining illicit maritime infrastructure by neutralizing the vast majority of the shadow fleet,” the official reportedly said. “Treasury is cutting off the regime’s last major source of illicit revenue and strengthening international pressure to hold Tehran accountable.”
The department also imposed sanctions on shipping and management companies linked to the vessels under a presidential executive order targeting Iran’s oil and petrochemical sectors.
In comments to MBN, Tom Warrick, a nonresident senior fellow at the Atlantic Council, said the significance of the move lies in its timing alongside the maritime pressure, which limits Iran’s ability to load oil onto tankers departing the strait. He said the combined efforts of the U.S. Navy and Treasury Department are what are likely to produce a significant impact.
For Warrick, financial sanctions alone do not necessarily mean the end of Iran’s ability to use its shadow fleet. While he does not question the Treasury Department’s ability to track vessels and impose sanctions on them, he believes Tehran may be able to replace the targeted ships.
The new economic sanctions come amid a pause in military operations between Iran and the United States. Since late July, Washington has largely relied on economic pressure instead of military strikes to push Tehran to sign an agreement.
Iran and the United States have exchanged proposals in recent weeks aimed at ending the war and reopening the Strait of Hormuz, vital to global energy shipping. Trump rejected Tehran’s latest offers but said Thursday that the talks were “productive” and that the United States would not attack Iran before the congressional midterm elections in November.
