Panama’s shipping registry says it has withdrawn its flag from 136 vessels linked to Islamic Republic in the last four years, denying claims it is knowingly helping Iran violate sanctions.
"The Panamanian registry canceled 136 ships in which their direct link with the National Iranian Oil Company (NIOC) was proven," Panama's Maritime Authority (AMP), said in a statement late on Tuesday. According to the US Treasury, the NIOC has strong links with Iran’s Islamic Revolutionary Guard Corps, which is coordinating the country’s sanctions evasion campaign.
An AMP spokesperson said that one-fifth of the 678 ships for which the registry withdrew flags for various reasons since 2019 were Iran-linked, adding "Panamanian authorities maintain a close relationship with the US secretary of the Treasury and other authorities of the United States.
Providing its flag to some 8,650 ships, the AMP runs the world’s largest vessel registry with 16 percent of the global fleet. It denied failing to act on evidence that tankers operating under its flag had shipped Iranian crude oil in contravention of US sanctions, reacting to allegations by United Against Nuclear Iran (UANI), which seeks to prevent the Islamic Republic from becoming a nuclear-armed regional superpower.
On Monday, former Florida Governor Jeb Bush, who is a member of UANI, called on Washington to pressure Panama to stop "helping" Tehran to evade sanctions.
Shipments of Iranian crude were much higher in 2022 than in 2019 and 2020, when US sanctions had a greater impact. Iran boosted illicit shipments to China from late 2020 as Joe Biden got elected US president and pledged to return to the 2015 nuclear deal, the JCPOA.
Earlier in the month, Iranian navy commander Rear Admiral Shahram Irani said Tehran is planning to extend its area of operation to the Panama Canal that divides South and North America.
According to videos on social media, truckers in some cities such as Tabriz in northwestern Iran and Zahedan in southeastern are stranded around gas stations apparently due to a lack of diesel fuel and compressed natural gas (CNG).
Gas supplies to homes, which the government tried to protect during past cold season crunches, have also been interrupted in some regions. While offices and schools in Iran have been closed for days due to a serious natural gas shortage, long lines have also been formed in the cities where people use gas in capsules for their daily needs.
Amid natural gas shortage due to the government inability to invest in production, a new wave of strikes by oil and gas industry workers has kicked off in the country.
On Thursday, workers of the Qeshm oil terminal joined the strikes which have already started with gatherings in Ahvaz, Asaluyeh, Dehloran, Shiraz, Ilam, Bandar Lengeh and Aghajari in the south and southwest of Iran.
The Qeshm oil terminal is a major oil export terminal being developed in the Qeshm Island that lies along the strategically important trade route of the Strait of Hormuz, off the southern coast of Iran.
Fadahossein Maleki, the representative of Zahedan in the parliament, said Wednesday that "There is no gas supply in many areas of Sistan-Baluchistan province.” Even bottled gas and kerosene that should be given to the people is scarce, he added.
Moineddin Saeedi, representing Chabahar, in the underprivileged province said at the parliament Wednesday that "In August, the oil minister predicted a harsh winter in Europe... Now we have seen that this did not happen there and unfortunately it happened in our own country." He added that gas has become a "luxury commodity" and access to it has become a dream for many people.
Similar problems have also been reported in other parts of the country such as the central province of Esfahan (Isfahan), northern provinces of Mazandaran and Golestan, and northeastern Khorasan provinces.
While Islamic Republic officials predicted a bad winter in Europe, offices, organizations, schools, and universities were shut down in many parts of Iran.
With natural gas shortage, Iran resorted to burning mazut at power stations, which is an extremely polluting fuel compared with cleaner diesel.
Iran has failed to invest in its gas production sector, although it has the world’s second largest reserves, while with extremely cheap prices for consumers, usage has been increasing ever faster. The distribution network also needs upgrades as more than 25 percent of the gas is lost during transfer.
Iran's gas production and extraction capacity is limited to around 800 million cubic meters per day. According to the ministry of energy, about 650 million cubic meters are consumed by domestic, commercial, and administrative users, however, the data has changed a lot in different years and contradict international estimates. The international energy organizations say less than 40% of Iran's natural gas is consumed at homes, but the Islamic Republic is trying to blame the shortage of gas on home users.
When the administration of President Ebrahim Raisi submitted the substantially enlarged draft state budget last week, it was apparent that the government has come up with plans to depend more on tax revenues instead of oil income. But now that the parliament has started reviewing the bill, it has become clearer that the administration plans to outsource most of its oil sales to military and religious organs.
In the budget bill for the next Iranian year, which starts March 21, the government has granted new permits to some departments such as the General Staff of the Armed Forces of the Islamic Republic and Astan Quds Razavi -- the Mashhad-based custodian and the administrative organization which managing a major religious shrine -- as well as a number pension funds to sell oil products on behalf of the government and earn some of the income.
According to the Note 1 of the bill – titled “Oil and its relations with the government” -- the National Iranian Oil Company is obligated to deliver “crude oil and gas condensates” to entities introduced by the executive bodies. As per the new measures, the General Staff of the Armed Forces is given the authority to sell and refine oil up to €4.5 billion. It means that the Armed forces can give crude oil to refineries and receive products that should be exported.
According to legal experts, this move, which also exists in a limited way in the current year’s budget, violates the constitution. This year, the government gave this permission to some individuals under the general title of "persons approved by executive bodies". The parliament had approved to give €3.5 billion of crude oil “to individuals” to sell on the world market and give the proceeds to the military. Last February, the Revolutionary Guard also received $80 million of oil from the government to sell as an additional budget appropriation. It also remains unclear who and under what conditions will export the oil amid US sanctions. Many members of Iran's hardliner dominated parliament are former members of the IRGC.
Sirous Omidvar, an Economics professor at the Allameh Tabatabai University, told Tejarat News that the legal details of such a mechanism are unclear and such economic handouts exclude ordinary business people. He predicts that such a mechanism is expected to lead to corruption.
A well-publicized scandal broke in 2013 when authorities arrested Babak Zanjani, a businessman, for embezzling at least $2.7 billion from illicit oil sales during international sanctions from 2009-2013. Zanjani used companies affiliated with the Revolutionary Guard (IRGC) for the oil he exported, leading to speculations that well-connected officials had a stake in the scheme. He received the death penalty which has so far not been carried out.
The draft budget is based on 1.4 million barrels of oil exports per day, despite US sanctions, an increase from the current reported figure of 800 thousand barrels. The discrepancy between reality and budget estimates gets even more interesting as the government expects to sell each barrel of oil for $85, while Iran is reportedly selling its oil to China at half that amount. The government estimate would mean more than $43 billion in oil revenues from March 2023 to March 2024. However, the official website of the government, IRNA, emphasized that the exact figure of crude exports is confidential and would not be announced due to the sanctions.
The projected oil exports in the budget are the clearest sign of unrealistic revenue estimates that will not materialize unless Iran resolves its differences with the United States over its nuclear program.
The government being aware that its oil revenue estimates are not realistic, it has substantially increased tax collection projections. In July, the Supreme Accounting Office released a report covering the period March 21- May 20 showing that except tax revenues, all other major sources of income grossly underperformed. The government’s revenues from taxes, oil exports, customs duties, etc. totaled 880 trillion rials or about $3.5 billion (average free market exchange rate at the time) in the 60-day period. This was just 37 percent of the projected budget revenues. It is important to note that only 15 percent of the projected oil income was collected.