The US is using an Iranian smuggling tactic to sneak oil out of the Gulf

Highlights:

• Apache shot down by Iran on 9 June was involved in ship-to-ship transfer mission
• Convoys sail dark with disabled transponders, spacing departures 3,000-4,000 meters apart
• At least 92 ships have taken part since early May

The United States military has overseen scores of secretive ship-to-ship oil transfers to keep Gulf energy exports flowing, using aerial and water drones as well as helicopters in an operation to guide convoys to awaiting tankers.

The operation on the edge of the Strait of Hormuz employs a shuttling technique long used by Iran to skirt sanctions. Two specific locations where the oil transfers take place were identified by 11 people familiar with the operation – one off the coast of Fujairah in the United Arab Emirates and the other off Oman's port of Sohar. It started in early May, and at least 92 ships have been involved in the transfers, according to shipping data and satellite imagery reviewed by Reuters.

As recently as 11 June, 17 pairs of ships could be seen carrying out simultaneous oil transfers at the two sites, according to satellite images ‌reviewed by Reuters.

An Apache helicopter downed by Iran on 9 June, sparking retaliatory bombings by the US, was involved in the mission, according to four sources, including a former US official with knowledge of the attack. Using satellite imagery, Reuters counted six pairs of tanker ships clustered together in a small area off the port of Sohar the day the Apache was shot down.

Reuters could not confirm what role the Apache played in the operation. In response to Reuters questions, a US defence official said no Central Command forces are taking part in an offshore ship-to-ship oil transfer operation. Both crew members were rescued by a drone boat, US officials said.

The extent of the ship-to-ship transfers, how they work, and the Apache's role in the operation have not been previously reported. The White House referred questions to Centcom. The Iranian government did not respond to requests for comment about the transfer operation.

The two spots where these transfers take place, in the Gulf of Oman near the exit of the Strait of Hormuz, are close to the boundaries drawn by the Persian Gulf Strait Authority, a new Iranian body established to manage the Hormuz Strait. Ships that fail to comply with Iran's orders are at risk of drone and missile attack by the Islamic Revolutionary Guard Corps.

The Fujairah port itself has come under repeated Iranian fire during the time this US-led operation has been underway. This past weekend, according to the British maritime risk management group Vanguard, an "unknown projectile" struck a tanker off the coast of Oman. Vanguard said in a statement that the crew was safe and that the ⁠impact caused some leakage of the cargo, but no environmental damage. It did not specify whether the tanker was involved in a ship-to-ship transfer.

Iran responded to the US-Israeli war by effectively closing the Strait of Hormuz, through which roughly a fifth of global oil consumption normally passes. That created the biggest global energy supply disruption in history and has spurred inflation around the world.

The ship-to-ship transfers, though risky and inefficient, appear to be a part of the Trump administration's efforts to help restore normal oil flows from the Gulf. US President Donald Trump said the Strait of Hormuz would reopen Friday under a framework peace deal with Iran announced this week, but details remain vague. Reuters could not determine whether the announced deal had affected the oil transfers.

A Reuters investigation published May 20 found that Iran has established its own system for ushering ships through the opposite side of the Strait, involving island checkpoints, diplomatic deals and sometimes fees.

Staggered departures and waypoints

The American transfer operations are fully controlled by the US military, said eight of the sources, including a private security contractor who has been involved in the transfers.

Tankers must sail to a meeting point before they reach the strait, then stagger their departures so they are around 3,000 to 4,000 metres apart, according to one of the sources as well as satellite imagery. Their transponders are off and their lights are dimmed, according to four sources.

A series of waypoints allow the US military to monitor the progress of the designated tankers, but the Americans are "obviously watching you all the time," one of the sources said.

When they pass through the strait, just beyond a zone that Iran has delineated as under its control, the tankers pull alongside the recipient ships, which are Very Large Crude Carriers, or VLCCs, to begin the oil transfers. These take between 24 and 40 hours to complete. The empty tankers then shuttle back through the strait and the newly loaded VLCCs sail onward.

What makes this ship-to-ship operation possible is that there are a few shippers willing to sail their vessels through the strait to deliver the oil to the waiting tankers, despite the Iranian blockade.

But the operation is risky. "You just don't know when Iran might just decide to start using drones or even gunboats in order to prevent even those ships from transiting the strait," said Noam Raydan, a senior fellow at Washington Institute who specializes in maritime risk and who reviewed Reuters' findings.

The ship-to-ship technique has been used by Iran for years to bypass sanctions, because it masks the source of the oil. ‌The Iranians usually operate one ⁠pair of ships at a time, both to avoid detection and because its prewar exports were relatively small. The US-led operation, which involves mass transfers, gives Gulf producers better protection from Iranian retaliatory attacks so they can move crude, condensate and petroleum products to international buyers.

Reuters reviewed more than a dozen satellite images taken between 2 May and 11 June showing ship-to-ship transfers involving state-owned Gulf tanker fleets and internationally operated vessels that receive the oil. LSEG and Kpler shipping data reviewed by Reuters showed repeated rendezvous between tankers operating in the area during the same period.

Based on the imagery, Reuters calculated that at least 90 million barrels of crude oil and petroleum products may have moved through the offshore network since early May. The volumes, based on the tankers' carrying capacities, are still small compared to the pre-war average of about 20 million barrels that passed through the strait daily.

"As the old rules weaken, it's ironic that the United States is now taking a page out of the playbook of China, Russia, North Korea, and even Iran, whose so-called 'dark fleets' pioneered these techniques precisely to evade US and UN sanctions," Michael Froman, president of the Council on Foreign Relations, wrote in a note Friday. He was referring to the practice of sending ships through the strait without transponders, which Trump mentioned in comments June 10 after the downing of the Apache.

Six sources with direct knowledge of ⁠the operation said the US has supported participating vessels through a combination of aerial surveillance, compliance screening and monitoring rather than naval escort. Reuters found no indication that US military personnel were directly involved in the transfers themselves.

Through the strait

The receiving side of the operation is dominated by international tanker operators, according to a review of the shipping records. One of them, Greece-based Dynacom Tankers Management, has alluded to its efforts to find creative ways to ship oil through the strait since the war began on 28 February.

"Freedom of navigation is essential and nobody can impose tolls or any other burden," George Procopiou, Dynacom's founder, told a Capital Link shipping conference in Athens on June 1. "We are here to serve, and Greece has the tradition of breaking blockades since antiquity," he said. "I don't want to go into more details, but I believe the hints are enough to understand what I mean."

Dynacom did not immediately respond to a request for ⁠comment on the US operation.

Another maritime source, however, said the new system imposes its own risks on their industry.

"There is a paucity of reliable data," the maritime security source said. The transponders used to communicate ships locations are switched off, "and companies are not reporting through the usual reporting centres." That risks collision between the ships, which travel at night with their lights off at speeds that don't allow for easy manoeuvring, according to multiple shipping industry officials.

Four sources familiar with the arrangements said operators seeking access to the system are required to undergo a compliance review process before being allocated transit windows. The process includes submitting information to the US Navy's Naval Cooperation and Guidance for Shipping office in Bahrain.

Two preliminary compliance documents reviewed by Reuters required operators to provide complete geospatial tracking histories, full beneficial ownership disclosure, cargo documentation and a willingness to ⁠permit cargo testing.

If they are approved, participating vessels are then assigned transit windows and remain in contact with the US military office in Bahrain throughout the voyage.

Emirati exports account for a substantial share of the US transfer operation, according to shipping records reviewed by Reuters. Six of the sources said UAE's state-owned national oil company ADNOC has been among the most active participants in the US-led transfers.

The Kuwait Oil Tanker Company has also been active in the transfers. Some 2.3 million barrels of crude were siphoned from one of its ships off the coast of Sohar on June 6, one of the busiest days for the transfers, according to TankerTrackers.com data. The receiving ship, Sea Ruby, was spotted five days later off India's southwest coast and bound for China, where the cargo was expected to be discharged.

The UAE government, ADNOC and the Kuwait Oil Tanker Company did not respond to requests for comment.

"I don't see a permanent solution in all of this," said Raydan. "This is a temporary solution amid exceptional times."