Iran says top waterways won’t be as safe if its oil exports cut to zero

FILE PHOTO: Iranian President Hassan Rouhani speaks during the cabinet meeting in Tehran, Iran, August 14, 2019. Official President website/Handout via REUTERS

GENEVA (Reuters) – If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, its president said on Wednesday, cautioning Washington against upping pressure on Tehran in an angry confrontation between the longtime foes.

The comment by President Hassan Rouhani coincided with a remark by Iranian Foreign Minister Mohammad Javad Zarif that Tehran might act “unpredictably” in response to “unpredictable” U.S. policies under President Donald Trump.

“World powers know that in the case that oil is completely sanctioned and Iran’s oil exports are brought down to zero, international waterways can’t have the same security as before,” Rouhani said while meeting Supreme Leader Ayatollah Ali Khamenei, according to Khamenei’s official website.

“So unilateral pressure against Iran can’t be to their advantage and won’t guarantee their security in the region and the world.”

Tensions between Tehran and Washington have risen since Trump’s administration last year quit an international deal to curb Iran’s nuclear ambitions and began to ratchet up sanctions. Iranian officials have denounced the new penalties as “economic warfare”.

In a speech at the Stockholm International Peace Research Institute, Zarif appeared to echo Rouhani’s tone.

“Mutual unpredictability will lead to chaos. President Trump cannot expect to be unpredictable and expect others to be predictable. Unpredictability will lead to mutual unpredictability and unpredictability is chaotic,” Zarif said.

Global commodity trading has been rocked in recent months after a series of attacks on international merchant vessels, which the United States has blamed on Iran, and the seizure of a British tanker. Tehran has denied the accusations.

Washington, which has by far the strongest Western naval contingent in the Gulf, has been calling for its allies to join it in an operation to guard shipping in the Strait of Hormuz, a vital gateway for the world’s oil industry.

So far, Britain, Australia and Bahrain have joined the U.S.-led security mission to protect merchant vessels traveling through key Middle East waterways.

Reiterating Iran’s chilly response to the security mission, Iranian Rear Admiral Ali Fadavi, a deputy commander of the elite Revolutionary Guards, said no one can secure the Gulf other than Iran and countries of the region, according to the semi-official Fars news agency.

“Securing the Persian Gulf is the responsibility of Iran and the countries of the region,” Fadavi said. “Other than us, no one can secure the Persian Gulf.”

(Reporting By Babak Dehghanpisheh; additional reporting by Simon Johnson in Stockholm and Tuqa Khalid in Dubai, Editing by William Maclean)

U.S. removed almost 2.7 million barrels daily of Iranian oil from market: Pompeo

FILE PHOTO: U.S. Secretary of State Mike Pompeo reacts as he talks to the media after his meeting with Lebanon's Prime Minister Saad al-Hariri at the State Department in Washington, U.S., August 15, 2019. REUTERS/Yuri Gripas

WASHINGTON (Reuters) – The United States has removed nearly 2.7 million barrels of Iranian oil from global markets daily as a result of Washington’s decision to reimpose sanctions on all purchases of Iran’s crude, U.S. Secretary of State Mike Pompeo said on Tuesday.

In an interview with MSNBC, Pompeo said the U.S. government was confident it could continue with its strategy.

The United States re-imposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers. In May, Washington ended sanction waivers given to importers of Iranian oil, aiming to cut Tehran’s exports to zero.

Iran exported about 100,000 bpd of crude in July, according to an industry source who tracks such flows and data from Refinitiv Eikon. If condensate, a light oil, is included, shipments were about 120,000 bpd a day.

“We have managed to take almost 2.7 million barrels of crude oil off of the market, denying Iran the wealth to create their terror campaign around the world, and we have managed to keep the oil markets fully supplied,” Pompeo said.

“I am confident we can continue to do that,” he added.

The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers have been cutting 1.2 million bpd since Jan. 1 to reduce global supply. OPEC in July renewed the pact until March 2020 to avoid a build-up of inventories as worldwide demand is seen weakening.

Despite OPEC’s actions along with U.S. sanctions on Iran and Venezuela, Brent crude international oil prices <LCOc1> have been relatively weak, falling on Tuesday to $59 a barrel from a 2019 high of $75, pressured by concerns about slowing demand.

The exact level of Iranian exports has become harder to assess since U.S. sanctions returned in November, meaning estimates fall into a range rather than a definitive figure.

 

(Reporting by Humeyra Pamuk and Doina Chiacu in Washington; Editing by Paul Simao)

Iran tanker heads to Greece after release, Iran warns U.S against seizure attempt

FILE PHOTO - Iranian oil tanker Adrian Darya 1, previously named Grace 1, sails after the Supreme Court of the British territory lifted its detention order, in the Strait of Gibraltar, Spain, August 19, 2019. REUTERS/Jon Nazca

DUBAI (Reuters) – An Iranian tanker sailed through the Mediterranean toward Greece on Monday after it was released from detention off Gibraltar, and Tehran said that any at U.S. move to seize the vessel again would have “heavy consequences”.

The Grace 1, renamed the Adrian Darya 1, left anchorage off Gibraltar about 11 p.m. (2100 GMT) on Sunday. Refinitiv ship tracking data showed on Monday that the vessel was heading to Kalamata in Greece and was scheduled to arrive next Sunday at 0000 GMT.

The seizure of the tanker by British Royal Marines near Gibraltar in July 4 on suspicion of carrying oil to Syria in violation of European Union sanctions led to a weeks-long stand-off between Tehran and the West. It also heightened tensions on international oil shipping routes through the Gulf.

Gibraltar, a British overseas territory, lifted the detention order on Thursday but the next day a federal court in Washington issued a warrant for the seizure of the tanker, the oil it carries and nearly $1 million.

FILE PHOTO - A crew member raises the Iranian flag on Iranian oil tanker Adrian Darya 1, previously named Grace 1, as it sits anchored after the Supreme Court of the British territory lifted its detention order, in the Strait of Gibraltar, Spain, August 18, 2019. REUTERS/Jon Nazca

FILE PHOTO – A crew member raises the Iranian flag on Iranian oil tanker Adrian Darya 1, previously named Grace 1, as it sits anchored after the Supreme Court of the British territory lifted its detention order, in the Strait of Gibraltar, Spain, August 18, 2019. REUTERS/Jon Nazca

Gibraltar said on Sunday it could not comply with that request because it was bound by EU law. Washington wanted to detain the tanker on the grounds that it had links to Iran’s Islamic Revolutionary Guard Corps (IRGC), which it has designated a terrorist organization.

“We are happy this ordeal has ended and I hope this will lead to less escalation,” Iranian Foreign Minister Mohammad Javad Zarif said while visiting Finland.

He also said the U.S. warrant had no legal basis and was politically motivated to “make more escalation”.

Greek authorities had no immediate comment on the situation.

Iran said on Monday any U.S. attempt to seize the tanker would have “heavy consequences”.

Asked whether the United States could renew its seizure request after the tanker sailed from Gibraltar, Foreign Ministry spokesman Abbas Mousavi said: “Such an action, and even the talk of it … would endanger shipping safety in open seas.”

“Iran has issued the necessary warnings through official channels, especially the Swiss embassy, to American officials not to commit such an error because it would have heavy consequences,” Mousavi said in remarks broadcast on state television.

Switzerland represents U.S. interests in Iran, which has no diplomatic relations with the United States.

The Adrian Darya 1, which was re-flagged to Iran after being de-listed by Panama on May 29, was fully laden and carrying about 2 million barrels of oil, Refinitiv data showed. The cargo was valued at tens of millions of dollars.

U.S. President Donald Trump pulled out of a 2015 nuclear deal with Iran in May last year, while the European Union is still part of the accord, which allows Tehran to sell its oil.

Washington wants to reduce Iran’s oil exports to zero and has re-imposed U.S. sanctions which place heavy penalties on any breaches even for non-U.S. citizens and companies, including asset freezes and being cut off from the U.S. financial system.

While EU regulations still allow for companies and citizens in the bloc to trade with Iran, falling foul of U.S. sanctions has meant most banks are unwilling to process even authorized transactions such as for food and medicine, finance sources say.

This is likely to be the first major foreign policy challenge for Greece’s new Prime Minister Kyriakos Mitsotakis since he took office in July if the vessel enters Greek territorial waters.

Zarif said Iran could not reveal where the oil would go.

“Because of US sanctions we cannot be very transparent with the destination,” he said.

A spokesperson for the Greek coastguard said they had no formal information the vessel is heading to Kalamata and are monitoring the matter.

TANKER HELD BY IRAN

Separately, a senior Iranian lawmaker said a crisis in Iran’s ties with Britain, which included Tehran’s seizure of a British-flagged tanker last month, would not be over until the tanker reached its destination.

Iran’s Revolutionary Guards on July 19 seized the Stena Impero in the Strait of Hormuz waterway for alleged marine violations, two weeks after the Grace 1 was commandeered.

“Until the Iranian oil tanker arrives at its destination the British must help end the crisis,” Heshmatollah Falahatpisheh, a member of parliament’s national security and foreign affairs committee, was quoted as saying by the semi-official ISNA news agency.

“The crisis with Britain is not over. Britain has the primary responsibility for ending the oil tanker crisis,” Falahatpisheh said.

Mousavi said that Tehran was waiting for a court decision on alleged maritime violations by the Stena Impero and he hoped the procedures would be completed as soon as possible.

The head of Iran’s judiciary Ebrahim Raisi also said “Iran should claim damages…to teach a lesson to those who acted against international laws and regulations by seizing the tanker”.

Iran has denied its tanker was ever headed to Syria, a close ally of Tehran.

The two vessels have since become pawns in a bigger game, feeding into wider hostilities since the United States pulled out of the nuclear agreement with Iran.

(Reporting by Dubai newsroom, Parisa Hafezi, Lisa Barrington, Anna Ringstrom in Helsinki Jonathan Saul in London, George Georgiopoulos in Athens and Harshith Aranya in Bengaluru; Editing by Angus MacSwan/William Maclean)

War with Iran is the mother of all wars: Iran president

Iranian President Hassan Rouhani is seen during a meeting with Iran's Foreign Minister Mohammad Javad Zarif and with deputies and Senior directors of the Ministry of Foreign Affairs in Tehran, Iran, August 6, 2019. Official President website/Handout via REUTERS

GENEVA (Reuters) – War with Iran is the mother of all wars, Iranian President Hassan Rouhani said on Tuesday in a speech broadcast live on state TV, warning once again that shipping might not be safe in the Strait of Hormuz oil waterway.

Tensions have risen between Iran and the West since last year when the United States pulled out of an international agreement which curbed the Islamic Republic’s nuclear program in return for an easing of economic sanctions on Iran.

“Peace with Iran is the mother of all peace, war with Iran is the mother of all wars,” Rouhani said at the Foreign Ministry in a speech which also praised Foreign Minister Mohammad Javad Zarif after the United States imposed sanctions on him on July 31.

If the United States wants to have negotiations with Iran then it must lift all sanctions, Rouhani said, noting that Iran must be allowed to export oil.

Fuelling fears of a Middle East war with global repercussions, the Guards seized British tanker Stena Impero near the Strait of Hormuz in July for alleged marine violations, two weeks after British forces captured an Iranian oil tanker near Gibraltar accused of violating sanctions on Syria.

“A strait for a strait. It can’t be that the Strait of Hormuz is free for you and the Strait of Gibraltar is not free for us,” Rouhani said.

Approximately one-fifth of the world’s oil traffic passes through the strategic Strait of Hormuz.

The Guards seized an Iraqi oil tanker in the Gulf on Wednesday which they said was smuggling fuel and detained seven crewmen, Iran’s state media reported.

(Story corrects date of Iraqi ship’s seizure)

(Reporting by Babak Dehghanpisheh; Editing by Alison Williams)

Iran says will not tolerate ‘maritime offences’ in Gulf

Iran's Foreign Minister Mohammad Javad Zarif gestures during a news conference in Tehran, Iran August 5, 2019. Nazanin Tabatabaee/WANA (West Asia News Agency) via REUTERS.

By Tuqa Khalid

DUBAI (Reuters) – Iran runs security in the Strait of Hormuz and will no longer tolerate “maritime offenses” there, its foreign minister said on Monday, a day after it seized a second oil tanker near the strategic waterway that it accused of smuggling fuel.

Tanker traffic through the Strait has become a focus for an increasingly tense standoff between Washington and Tehran, into which Britain has also been dragged, and the United States has beefed up its military presence in the Gulf since May.

On Sunday, Iran’s elite Revolutionary Guards Corps seized the Iraqi tanker north of the Strait and detained its seven crew, state media reported. Guards commander Ramezan Zirahi was quoted as saying it was carrying 700,000 liters of fuel.

“Iran used to forgo some maritime offenses in … (the) Gulf but will never close (its) eyes anymore,” Foreign Minister Mohammad Javad Zarif told a televised news conference in Tehran.

“… Iran is responsible for the security and safety of the Strait of Hormuz and the region.”

Iran has threatened to block all exports via the Strait, through which a fifth of global oil traffic passes, if other countries comply with U.S. pressure to stop buying Iranian oil.

Zarif criticized U.S. sanctions imposed on him on Wednesday, saying Washington had closed the door to diplomacy over Iran’s 2015 nuclear deal, which U.S. President Donald Trump exited last year.

The deal with a handful of global powers had curbed Tehran’s nuclear work in return for an easing of sanctions, striking a delicate political balance that the U.S. pullout has destabilized.

Strains between Washington and Tehran have heightened further since the spring. In June, Iran’s downing of a U.S. drone prompted preparations for a U.S. retaliatory airstrike that Trump called off at the last minute.

Angered by intensified U.S. sanctions designed to strangle its vital oil trade and the failure of European parties to agree on a way of salvaging the nuclear agreement, Tehran has scaled back its commitments under the pact.

“Iran will leave its 2015 nuclear deal with powers if necessary,” Zarif said on Monday, adding that all measures taken by Iran were, however “reversible if its interests under the deal are secured.”

Iran has so far rejected calls by the Trump administration to negotiate a new deal.

Zarif called for improved ties with Iran’s rivals in the Middle East, where it has been involved in proxy wars for decades with Sunni Saudi Arabia.

He also labeled as “piracy” the seizure by Britain in July of an Iranian oil tanker near Gibraltar that London accused of violating sanctions on Syria.

Two weeks later, Iran’s Revolutionary Guards seized a British tanker, Stena Impero, near the Strait of Hormuz for alleged marine violations.

“Britain has been complicit in the U.S. economic terrorism against Iran,” Zarif said.

(Writing by Parisa Hafezi; Editing by John Stonestreet)

Britain tells Iran: release ship to ‘come out of the dark’

A satellite image of the Iranian port city of Bandar Abbas reveals the presence of the seized British oil tanker, the Stena Impero on July 22, 2019. Satellite image ©2019 Maxar Technologies/Handout via REUTERS

By Andrew MacAskill

LONDON (Reuters) – Britain told Iran on Monday that if it wants to “come out of the dark” it must follow international rules and release a British-flagged oil tanker seized by its forces in the Gulf.

Iranian commandos seized the Stena Impero near the Strait of Hormuz, the world’s most important waterway for oil shipments, on July 19. That was two weeks after British forces captured an Iranian oil tanker near Gibraltar accused of violating sanctions on Syria.

“If the Iranians want to come of the dark and be accepted as a responsible member of the intentional community they need to adhere to the rules-based system of the international community,” Foreign Secretary Dominic Raab told Sky News.

“You cannot go about detaining unlawfully foreign vessels.”

Tehran is angered by renewed sanctions imposed by the United States and what it sees as the failure of Britain and European powers to protect it from the fallout of Washington’s withdrawal from a nuclear agreement between Iran and world powers.

Under the 2015 deal, international sanctions on Iran were relaxed in exchange for Tehran curbing its nuclear program.

Britain last week started sending a warship to accompany all British-flagged vessels through the Strait of Hormuz, a change in policy announced on Thursday after the government previously said it did not have resources to do so.

The Defence Ministry said on Sunday that a second warship, the HMS Duncan, had arrived in the Gulf to support the passage of British-flagged ships through the strait, joining the HMS Montrose.

Raab made his comments on Monday as Iran’s elite Revolutionary Guards published footage purportedly showing the Guards warning off a British warship during the seizure of the Stena Impero.

The video, published by the semi-official Tasnim news agency, contains footage of the capture of the tanker, showing Guards abseiling onto the deck from a helicopter, with the audio recording superimposed.

Press TV, Iran’s state-run English language news channel, identified the British warship mentioned in the exchange as the Montrose.

“You are required not to interfere in these issues,” the Guards’ navy representative says.

“This is British warship foxtrot two three six. I am in the vicinity of an internationally recognized strait with a merchant vessel in my vicinity conducting transit passage,” a voice with a British accent replies.

“Don’t put your life in danger,” the Guards navy representative says.

NOT ‘SOME KIND OF BARTER’

In another interview on Monday, with BBC radio, Raab said that the two seizures of ships were not equivalent.

“Grace 1 was intercepted because it was in breach of sanctions and heading with oil for Syria and that was the intelligence,” he said, referring to the Iranian ship seized by Britain.

“We were absolutely lawful entitled to detain it in the way we did. The Stena Impero was unlawfully detained. This is not about some kind of barter. This is about the international law and the rules of the international legal system being upheld and that is what we will insist on.”

Iran has said it did not capture the Stena Impero in retaliation for the Grace 1 seizure.

Raab was asked if he hoped for U.S. support for a British-proposed European naval task force to protect shipping in the Strait of Hormuz. He said he wanted to see a European-led approach but it would be important to have the initiative have U.S. support to make it “viable and effective”.

The Iranian video aired on Monday also contains an exchange between the Guards and the same British warship during a stand-off in mid-July involving the British Heritage oil tanker, according to Tasnim.

Aerial video footage of the warship, recorded by an Iranian drone, is shown during the second round of exchanges, Tasnim reported.

Three Iranian vessels attempted to block the passage of the British Heritage through the Strait of Hormuz but withdrew after warnings from a British warship, the British government said on July 11

(Additional reporting by Babak Dehghanpisheh in Geneva; Writing by Frances Kerry; Editing by Raissa Kasolowsky and Angus MacSwan)

Iran intends to restart activities at Arak heavy water nuclear reactor: ISNA news agency

The Iranian flag flutters in front the International Atomic Energy Agency (IAEA) headquarters in Vienna, Austria July 10, 2019. REUTERS/Lisi Niesner

GENEVA (Reuters) – The head of Iran’s Atomic Energy Organization, Ali Akbar Salehi, told lawmakers on Sunday that Iran will restart activities at the Arak heavy water nuclear reactor, the ISNA news agency reported.

ISNA cited a member of parliament who attended the meeting. Heavy water can be employed in reactors to produce plutonium, a fuel used in nuclear warheads.

Iran stopped complying in May with some commitments in the 2015 nuclear deal that was agreed with global powers after the United States unilaterally withdrew from the accord in 2018 and re-introduced sanctions on Tehran.

The remaining signatories have tried to hold the nuclear deal together, an increasingly difficult task as tensions between Washington and Tehran have soared in recent weeks.

On July 3, President Hassan Rouhani said Tehran would increase its uranium enrichment levels and start to revive its Arak heavy-water reactor after July 7 if the nations in the nuclear pact did not protect trade with Iran promised under the deal but blocked by the U.S. sanctions.

The reduction of commitments can be reversed, Iranian officials have said, if the remaining signatories to the deal uphold their promises.

Western powers have said Iran’s nuclear ambitions must be curbed due to their concerns that Tehran intends to build nuclear weapons. Tehran denies this.

The meeting on Sunday of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA), the deal’s formal name, will be chaired by the EU foreign policy service’s Secretary General Helga Schmid.

(Reporting By Babak Dehghanpisheh; Editing by Raissa Kasolowsky)

Israel says Arrow-3 missile shield passes U.S. trials, warns Iran

Israeli Prime Minister Benjamin Netanyahu and U.S. Ambassador to Israel David Friedman talk after watching a video of Israel's U.S.-backed Arrow-3 ballistic missile shield performing a series of live interception tests over Alaska, U.S., during a cabinet meeting in Jerusalem July 28 2019. Menahem Kahana/Pool via REUTERS

By Dan Williams

JERUSALEM (Reuters) – Israel’s U.S.-backed Arrow-3 ballistic missile shield has passed a series of live interception tests over Alaska, Prime Minister Benjamin Netanyahu said on Sunday, casting the achievement as a warning to Iran.

Jointly manufactured by U.S. firm Boeing Co, Arrow-3 is billed as capable of shooting down incoming missiles in space, an altitude that would destroy any non-conventional warheads safely. It passed its first full interception test over the Mediterranean Sea in 2015 and was deployed in Israel in 2017.

Israeli Prime Minister Benjamin Netanyahu and U.S. Ambassador to Israel David Friedman talk after watching a video of Israel's U.S.-backed Arrow-3 ballistic missile shield performing a series of live interception tests over Alaska, U.S., during a cabinet meeting in Jerusalem July 28 2019. Menahem Kahana/Pool via REUTERS

Israeli Prime Minister Benjamin Netanyahu and U.S. Ambassador to Israel David Friedman talk after watching a video of Israel’s U.S.-backed Arrow-3 ballistic missile shield performing a series of live interception tests over Alaska, U.S., during a cabinet meeting in Jerusalem July 28 2019. Menahem Kahana/Pool via REUTERS

“The performance was perfect – every hit a bull’s eye,” Netanyahu, who doubles as defense minister, said in a statement announcing the three secret tests.

Israel views the Arrow-3 as a bulwark against the ballistic missiles fielded by Iran and Syria.

Iran has been locked in a spiraling confrontation with the United States over its nuclear program and missile projects.

Washington said last week that Iran appeared to have tested a medium-range ballistic missile that flew about 1,000 km (620 miles). Tehran said such tests were for defensive needs.

“Today Israel has the capabilities to act against ballistic missiles launched at us from Iran and from anywhere else,” Netanyahu said on Sunday. “All our foes should know that we can best them, both defensively and offensively.”

Arrow-3’s Alaska trials had been expected last year but were postponed, following earlier difficulties in testing the system.

Its first full trial, scheduled in 2014, was aborted due to what designers said was a faulty flight by the target missile. Follow-up Israeli tests in late 2017 and early 2018 were also called off at short notice due to technical problems.

The system’s success in Alaska was held up by both Israel and the United States as a sign of the strength of their alliance.

The U.S. ambassador to Israel, David Friedman, attended Sunday’s meeting of Netanyahu’s cabinet, where he and the ministers watched a video of an Alaska missile interception.

Israel’s Ministry of Defense said that, as part of the Alaska tests, Arrow-3 was successfully synched up with the AN-TPY2 radar – also known as X-band – which provides the United States with extensive global coverage. Israel hosts an X-band battery.

“We are committed to assisting the government of Israel in upgrading its national missile defence capability to defend the state of Israel and deployed U.S. forces from emerging threats,” Vice Admiral John Hill, director of the Pentagon’s Missile Defence Agency, said in a statement.

Arrow-3 and an earlier generation system, Arrow-2, serve as the top tier of an integrated Israeli shield built up with U.S. backing to withstand various potential missile or rocket salvoes. The bottom tier is the short-range Iron Dome interceptor while David&rsquo;s Sling shoots down mid-range missiles.

Also involved in Arrow’s manufacturing are Israel Aerospace Industries, Rafael Advanced Defense Systems and the Elisra Company, a subsidiary of Elbit Systems Ltd.

(Writing by Dan Williams; Editing by Susan Fenton)

Iran says meeting with parties to nuclear deal ‘constructive’

Iran's top nuclear negotiator Abbas Araqchi and EEAS Secretary General Helga Schmid attend a meeting of the JCPOA Joint Commission in Vienna, Austria July 28, 2019. REUTERS/Kirsti Knolle

By Kirsti Knolle

VIENNA (Reuters) – An emergency meeting with parties to Iran’s 2015 nuclear deal was constructive but there are unresolved issues and Tehran will continue to reduce its nuclear commitments if Europeans fail to salvage the pact, Iranian official Abbas Araqchi said on Sunday.

“The atmosphere was constructive. Discussions were good. I cannot say that we resolved everything, I can say there are lots of commitments,” Araqchi, the senior Iranian nuclear negotiator, told reporters after the meeting in Vienna.

Parties to the agreement – Britain, Germany and France plus Russia and China – met Iranian officials for talks called in response to an escalation in tensions between Iran and the West that included confrontations at sea and Tehran’s breaches of the nuclear accord.

“As we have said, we will continue to reduce our commitments to the deal until Europeans secure Iran’s interests under the deal,” Araqchi said.

The parties have been trying to salvage the pact since the United States withdrew from it in May 2018 and re-imposed and toughened sanctions on Iran, crippling an already weak economy.

The Europeans say further breaches of the agreement by Iran would escalate confrontation at a time when Tehran and Washington are at risk of a miscalculation that could lead to war.

However, their efforts to protect trade with Iran against the U.S. sanctions have yielded nothing concrete so far. Earlier this month, Tehran followed through on its threat to increase its nuclear activities in breach of the agreement.

Iran has said it will withdraw from the pact unless the Europeans find ways to shield its economy from the U.S. sanctions.

“All our steps taken so far are reversible if other parties to the deal fulfill their commitments,” an Iranian diplomat told Reuters ahead of the meeting.

In response to the sanctions, Iran said in May it would decrease its commitments under the nuclear pact. Under the deal, most international sanctions against Tehran were lifted in 2016, in exchange for limitations on its nuclear work.

So far, Iran has breached the limit of its enriched uranium stockpile as well as enriching uranium beyond a 3.67% purity limit set by its deal with major powers, defying a warning by Europeans to stick to the deal despite U.S. sanctions.

The U.N. nuclear watchdog, policing the deal, has confirmed the measures announced by Tehran.

SANCTIONS

Fu Cong, director-general of the Department of Arms Control of the Chinese Foreign Ministry, who leads the Chinese delegation, said: “All sides have expressed their commitment to safeguard the JCPOA (nuclear deal) and to continue to implement the JCPOA in a balanced manner.

“All sides have expressed their strong opposition against the U.S. unilateral imposition of sanctions.”

The meeting came after Iran&rsquo;s elite Revolutionary Guards seized a British-flagged oil tanker on July 19, two weeks after British forces captured an Iranian oil tanker near Gibraltar which it said was violating sanctions on Syria.

Araqchi said Britain’s seizure of the Iranian tanker was a violation of the nuclear pact.

“The countries who are part of (the nuclear deal) shouldn’t create obstacles for the export of Iranian oil,” Araqchi said.

Britain has called for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, a vital international oil shipping route. An Iranian government spokesman said on Sunday such a mission would send a “hostile message”.

Britain said on Sunday Royal Navy destroyer HMS Duncan had arrived in the Gulf to join a British frigate escorting British-flagged ships through the Strait.

The seizure of the British tanker in the world’s most important waterway for the oil trade has deepened a crisis between Iran and the West. Iranian President Hassan Rouhani said Britain’s seizure of the Iranian oil tanker was illegal and would be detrimental for Britain.

After meeting Iranian officials in Tehran, Oman’s Foreign Minister Yousuf bin Alawi bin Abdullah said all parties should maintain contact to avoid more incidents in the Strait.

Iran has threatened to disrupt oil shipments through the waterway if the United States tries to strangle its economy with sanctions on its vital oil exports.

Several oil tankers were attacked in waters near Iran&rsquo;s southern coast in May and June, for which the United States blamed Iran. Tehran denied any involvement.

Iran in June shot down a U.S. military surveillance drone in the Gulf, which Tehran said had violated its air space. Washington said the drone was in international skies.

(Additional reporting by Parisa Hafezi, Aziz El Yaakoubi and Lisa Barrington in Dubai and Babak Dehghanpisheh in Geneva, Writing by Parisa Hafezi,; Editing by Janet Lawrence)

Flags of inconvenience: noose tightens around Iranian shipping

FILE PHOTO: Iranian oil tanker Grace 1 sits anchored after it was seized earlier this month by British Royal Marines off the coast of the British Mediterranean territory on suspicion of violating sanctions against Syria, in the Strait of Gibraltar, southern Spain July 20, 2019. REUTERS/Jon Nazca/File Photo

By Jonathan Saul, Parisa Hafezi and Marianna Parraga

LONDON/DUBAI/PANAMA CITY (Reuters) – Somewhere on its journey from the waters off Iran, around Africa’s southern tip and into the Mediterranean, the Grace 1 oil tanker lost the flag under which it sailed and ceased to be registered to Panama. Iran later claimed it as its own.

The ship carrying 2 million barrels of Iranian crude was seized by British Royal Marines off Gibraltar, raising tensions in the Gulf where Iran detained a UK-flagged ship in retaliation.

Grace 1 remains impounded, not because of its flag but because it was suspected of taking oil to Syria in breach of EU sanctions, an allegation that Iran denies.

Yet Panama’s move on May 29 to strike it from its register mid-voyage was part of a global squeeze on Iranian shipping.

Nations that register vessels under so-called “flags of convenience” allowing them to sail legally have de-listed dozens of tankers owned by Iran in recent months, tightening the economic noose around it.

In the biggest cull, Panama, the world’s most important flag state, removed 59 tankers linked to Iran and Syria earlier this year, a decision welcomed by the United States which wants to cut off Tehran’s vital oil exports.

Panama and some other key flag states are looking more closely at the thousands of ships on their registers to ensure they comply with U.S. sanctions that were re-imposed against Iran last year and tightened further since.

A Reuters analysis of shipping registry data shows that Panama has de-listed around 55 Iranian tankers since January, Togo has de-listed at least three and Sierra Leone one.

That represents the majority of its operational fleet of tankers, the lifeblood of the oil-dominated economy, although Iran may have re-registered some ships under new flag states.

When a vessel loses its flag, it typically loses insurance cover if it does not immediately find an alternative, and may be barred from calling at ports. Flags of convenience also provide a layer of cover for a vessel’s ultimate owner.

International registries charge fees to ship owners to use their flags and offer tax incentives to attract business.

Iran said it still had plenty of options.

“There are so many shipping companies that we can use. In spite of U.S. pressure, many friendly countries are happy to help us and have offered to help us regarding this issue,” said an Iranian shipping official, when asked about tankers being de-listed.

Some nations have expressed caution, however. The world’s third-biggest shipping registry, Liberia, said its database automatically identified vessels with Iranian ownership or other connections to the country.

“Thus, any potential request to register a vessel with Iranian connection triggers an alert and gets carefully vetted by the Registry’s compliance and management personnel,” the registry said.

Liberia said it was working closely with U.S. authorities to prevent what it called “malign activity” in maritime trade.

IRANIAN FLAG

In many cases Iran has re-listed ships under its own flag, complicating efforts to move oil and other goods to and from the dwindling number of countries willing to do business with it.

Some shipping specialists said the Iranian flag was problematic because individuals working for the registry in Iran could be designated under U.S. sanctions, and so present a risk for anyone dealing with vessels listed by them.

“Most insurance companies or banks will not be able to deal with the Iranian flag as it is in effect dealing with the Iranian state,” said Mike Salthouse, deputy global director with ship insurer the North of England P&amp;I.

Customs officials may also sit up and take notice.

“One of the problems with an Iranian-flagged ship is that there is a 50 percent chance that a customs officer will undertake a search, which means the cargo will be delayed,” said a U.N. sanctions investigator, who declined to be named. “These all add to the costs.”

A former U.S. diplomat said Washington was often in contact with Panama and other flag states to keep vessel registries “clean”.

“We are continuing to disrupt the Qods Force’s illicit shipments of oil, which benefit terrorist groups like Hezbollah as well as the Assad regime (in Syria),” said a spokesman at the U.S. State Department.

Qods Force refers to an elite unit of Iran’s Islamic Revolutionary Guards Corps that is in charge of the Guards’ overseas operations, and Hezbollah is an Iran-backed, heavily armed Shi’ite Muslim group that forms part of Lebanon’s coalition government.

“Nearly 80 tankers involved in sanctionable activity have been denied the flags they need to sail,” the spokesman added.

FALSE FLAGS

De-flagging Iranian ships is just one way the international community can squeeze Iran.

U.S. sanctions on oil exports aim to reduce Iran’s sales to zero. Iran has vowed to continue exporting.

In the first three weeks of June Iran exported around 300,000 barrels per day (bpd), a fraction of the 2.5 million bpd that Iran shipped before President Donald Trump’s exit in May last year from the 2015 nuclear deal with major powers.

Egypt could also complicate life for Tehran if it denies passage to tankers heading to the Mediterranean through the Suez Canal. The alternative route around Africa, taken by Grace 1 before its seizure, is far longer.

Refinitiv shipping data showed the Masal, an Iranian-flagged oil tanker, anchored in the Suez Canal’s waiting zone on July 6. It stayed there until July 12, when it began to sail south. It exited the Red Sea on July 17 and docked at Larak Island, Iran on July 23.

Two Egyptian intelligence sources told Reuters that the tanker was halted in the Red Sea in July by authorities “without anyone knowing the reason”.

A second senior Iranian government official involved in shipping declined to comment when asked about the Masal.

The Suez Canal Authority’s spokesman said Egypt did not bar vessels from crossing the canal except in times of war, in accordance with the Constantinople Convention. He declined to comment further.

Britain tightened the screw when it seized the Grace 1 supertanker on July 4, accusing it of violating sanctions against Syria.

Two Iranian-flagged ships have been stranded for weeks at Brazilian ports due to a lack of fuel, which state-run oil firm Petrobras refuses to sell them due to U.S. sanctions. Two more Iranian ships in Brazil could also be left without enough fuel to sail home.

A recent incident off Pakistan’s coast last month points to the lengths Iran has gone to in order to keep trading.

The Iranian cargo carrier Hayan left from the Iranian port of Bandar Abbas on June 3 and set sail for Karachi on Pakistan’s coast, according to ship tracking data from maritime risk analysts Windward.

On June 7, it changed its name to Mehri II and its flag to that of Samoa, the data showed, as it made its way toward Karachi port.

Six days later, the vessel conducted a ship-to-ship transfer of its unknown cargo further up Pakistan’s coast.

The ship then returned home, changing its flag back to Iran and its name back to Hayan.

Imran Ul Haq, spokesman for the Pakistan Maritime Security Agency, said they had no information when asked about the Iranian ship’s activity.

Iran has frequently used ship-to-ship transfers to move oil and oil products since U.S. sanctions were reimposed.

Shipping data also show that a separate Iranian-owned cargo ship, the Ya Haydar, has been sailing around the Gulf and reporting its flag as that of Samoa.

Samoa denies allowing Iran to register any ships under its flag.

“The said vessels Hayan or Ya Haydar are not, and have never been listed, nor registered on the Samoa’s registry of vessels,” said Anastacia Amoa-Stowers of the Maritime department at Samoa’s Ministry of Works, Transport &amp; Infrastructure.

“Given there are currently no Iranian ships listed on Samoa’s registry, there is no action to de-list a vessel. Additionally, there has never been any Iranian ships listed on Samoa’s vessel registry &ndash; previously and at present.”

Amoa-Stowers said Samoa was a closed registry, meaning that any foreign vessel flying its flag was doing so illegally.

The second senior Iranian government official involved in shipping declined to comment when asked about the two vessels.

A spokeswoman with the International Maritime Organization said the UN’s shipping agency had received information from Samoa which has been circulated to member states.

(Additional reporting by Lesley Wroughton in Washington, Syed Raza Hassan in Karachi, Edward McAllister in Dakar, Alphonso Toweh in Monrovia, John Zodzi in Lome, Praveen Menon in Wellington, Yousef Saba and Sami Aboudi in Cairo; Editing by Mike Collett-White)