US sanctions UAE-based Octane Energy Group for alleged Iranian links in LPG supply to Bangladesh

The US Department of the Treasury's Office of Foreign Assets Control (OFAC) and the Department of State have imposed sanctions on over 30 entities and vessels for allegedly facilitating the trade and transportation of Iranian petroleum-related products.

Among the sanctioned entities is UAE-based Octane Energy Group FZCO, a supplier of liquefied petroleum gas (LPG) to Bangladesh, raising concerns over the country's energy imports.

Octane Energy supplied a 40,039.13-tonne shipment of LPG to Bangladesh via the Panama-flagged vessel GAZ GMS, which arrived at Chattogram Port on 3 October 2024.

The LPG Operators Association of Bangladesh (Loab) later alleged in a letter to the Chittagong Port Authority (CPA) and other government bodies that the shipment had been loaded from Iran, a sanctioned country. Loab urged authorities to detain the vessel and take necessary legal action.

In response, CPA formed an investigative committee comprising officials from CPA, Customs, the Bangladesh Coast Guard, and the Mercantile Marine Department.

The committee, however, found no evidence of an Iranian connection, stating that GAZ GMS had loaded the LPG at Mina Rashid, UAE, through a ship-to-ship operation from 4 to 14 September 2024, and later refuelled at Khorfakkan, UAE, before heading to Chattogram.

US sanctions raise questions over investigation

Despite the CPA committee's findings, the latest US sanctions on Octane Energy have cast doubt on the credibility of the investigation. Lloyd's List, a maritime intelligence platform, had previously questioned the accuracy of the Bangladeshi probe, reporting in December 2024 that the committee had wrongly determined the origins of cargoes aboard GAZ GMS and another vessel, Captain Nikolas.

With the US intensifying enforcement against entities tied to Iranian petroleum, the sanctions could have significant implications for Bangladesh's energy security and import policies. The government may face renewed pressure to reassess the CPA investigation and scrutinise LPG sourcing practices to avoid potential secondary sanctions.

CPA defends investigation

Amid growing concerns, Captain Faridul Alam, deputy conservator of CPA and a member of the investigative committee, defended the probe's findings, stating that the report reflected the available documentation.

"The documents showed that the LPG was loaded from UAE, but the Panama-flagged ship was owned by an Iranian company," Captain Farid said.

He further asserted that, under international maritime and trade laws, Bangladesh has the right to receive cargo from Iran, given that the two countries share bilateral diplomatic relations.

Providing an example, Captain Farid recalled an incident two years ago when a US-sanctioned vessel carrying cargo from Iran via Singapore was initially denied entry but was later granted access following a request from the Iranian Ambassador to Bangladesh and a government directive.

New sanctions may have implications

The new sanctions could have major implications for Bangladesh's energy sector, particularly in terms of LPG supply chain integrity. Bangladeshi companies dealing with Octane Energy may also face sanctions.

Captain Gias Uddin, Chief Nautical Surveyor of the Department of Shipping, told The Business Standard that doing business with or transporting products from sanctioned companies could pose risks for Bangladesh.

"The companies dealing with sanctioned entities and the vessels transporting their products may also come under sanctions. Though there is no legal obligation to avoid such dealings, the Ministry of Shipping discourages them due to the risk of harming the country's image," he explained.

Loab President Amirul Hoque said, "We always discourage dealings with any sanctioned company as there is always a risk involved."

"If Octane Energy has been sanctioned, Bangladeshi operators should avoid sourcing LPG from this company," he added.

When contacted, Arief Hossain Khan, spokesperson for Bangladesh Bank, told The Business Standard that Bangladeshi companies cannot conduct transactions with a sanctioned entity.

"If the cargo is imported before the sanction was imposed, the company will not be able to settle the letter of credit (LC) payment once the sanction takes effect," he added.

Wider US crackdown on Iranian petroleum trade

The US sanctions extend beyond Octane Energy, targeting key players in the Iranian petroleum trade, including Iran-based Kangan Petro Refining Company, India-based BSM Marine LLP, Austinship Management, Cosmos Lines Inc, UAE-based

Alkonost Maritime DMCC, Malaysia-based IMS Ltd, and Seychelles-based Oceanend Shipping Ltd.

These entities have been designated under Executive Order 13846 for their involvement in significant transactions related to Iranian petroleum and petrochemical products.

The US Department of the Treasury announced these measures via a press release on 24 February 2025.

As the sanctions create fresh complications for Bangladesh's energy sector, it remains to be seen how authorities will navigate the situation while balancing diplomatic and trade relations with both the US and Iran.