U.S.-Seized Iranian Fuel Cargoes Stuck In Legal Limbo | OilPrice.com

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The cargoes of Iranian gasoline that the United States seized more than a month ago continue to idle off the U.S. Gulf Coast amid a court battle over ownership of the cargo and the grounds for confiscation. 

In the middle of August, the U.S. Administration said it had seized the fuel cargo of several vessels, alleging that the fuel came from Iran and was going to Venezuela. The confiscation followed a lawsuit filed by U.S. prosecutors for the seizure of the cargo carried by the four vessels for violating U.S. sanctions against Venezuela. 

The U.S. Department of Justice announced at the time “the successful disruption of a multimillion-dollar fuel shipment by the Islamic Revolutionary Guard Corps (IRGC), a designated foreign terrorist organization, that was bound for Venezuela. These actions represent the government’s largest-ever seizure of fuel shipments from Iran.” 

The cargo from all four vessels, totaling 1.116 million barrels of petroleum, is now in U.S. custody, the Justice Department said. 

However, companies claiming ownership of the fuel asked this week a U.S. judge to release the cargoes, because, the firms claim, the U.S. forfeiture “relies on a series of unfounded assumptions,” Reuters reported, noting that the Iranian fuel remains stuck at sea and cannot discharge at a U.S. port. 

The companies claiming ownership of the fuel say that the gasoline was intended for buyers in Peru and Colombia, not Venezuela. 

Venezuela is in the grips of a severe gasoline shortage as refineries are unable to operate normally because of a shortage of diluents necessary for the production of fuels as well as an urgent need for repairs.

Iran, as a fellow target of U.S. sanction, has declared its readiness to help Venezuela deal with the shortage and earlier this year managed to send cargoes of fuel to the Latin American country.

Iran and Venezuela have also recently exchanged crude oil, in defiance of the U.S. sanctions. After Iran delivered condensate to Venezuela via an Iran-flagged tanker, the same tanker is now loading Venezuelan crude oil at a terminal in the Latin American country, Bloomberg reported earlier this week, quoting a shipping report. 

By Charles Kennedy for Oilprice.com 

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Have lived and invested in Venezuela full time for the last eight years and visited for each of twelve years prior to that. Studied and closely followed developments in Venezuela since 1996.