Greek Supreme Court to Decide Fate of Seized Iranian Oil

The battle for the control of a 104,000 metric ton shipment of Iranian oil returned to the Greek courts today with the United States continuing to press its claims to seize the shipment which has been under dispute for the past three months. The claims to the oil were presented to the Greek Supreme Court which is expected to rule shortly if the oil will be returned to Iran or if the U.S. can continue with its seizure.

Adding a new complication to the case, the shipping company hired by the United States to transship the oil from the tanker is seeking to intervene in the Supreme Court case. Greece’s Times Navigation Company, manager of the crude oil tanker Ice Energy asked the Supreme Court for the right to intervene in the case saying it is caught between the United States and the Greek courts placing its business in jeopardy.

The dispute began in April when a Russian-flagged tanker the Pegas experienced mechanical problems and sought refuge off the Greek island of Evia. Greek authorities initially said the tanker was being detained due to the EU sanctions on Russian shipping and oil interests, but later said the tanker would be released due to uncertainty on its ownership. In the meantime, the tanker was also being detained due to issues during a Port State inspection.

The United States went to court seeking to seize the crude shipment aboard the vessel that it had previously sanctioned for its involvement with the Iranian oil trade. An NGO watchdog organization highlighted that the oil aboard the tanker was not Russian but had been loaded months earlier in Iran.

After winning the court order, the U.S. chartered two tankers from Times Navigation to load the oil from the tanker and transfer it to Newport, Texas. The Ice Energy began the transfer of 60,000 tons of oil from the tanker which Iran was by then identifying as the Lana reporting it was registered in Iran, not Russia. The Ice Energy completed the transfer on June 2 and moved away so that a second tanker could be positioned alongside to complete the transfer of the Iranian oil. It appears the second transfer never began.

Before the transshipment was completed, a Greek appeals court overturned the lower court ruling for the United States and ordered the tanker released and the oil returned to Iran. The United States has however continued to seek to block the return of the oil.

Times Navigation told the Greek Supreme Court that the United States is seeking to enforce its contract for the delivery of the oil. The Greek shipping company reported that the US Department of Justice has warned that failure to comply with the contractual obligations would result in a 20-year prison sentence and numerous sanctions against the company and its management.

While both sides wait for the Greek Supreme Court to decide the fate of the oil, Iran also continues to hold two Greek tankers that it seized in retaliation for the confiscation of its oil shipment. The Greek tankers Delta Poseidon and Prudent Warrior are being held with their cargos and a total of 49 crewmembers at the anchorage of the Iranian port of Bandar Abbas. It was widely anticipated Iran would release the tankers after possession of the oil shipment was returned.

For now, the Lana and the Ice Energy are both in the Piraeus anchorage awaiting the decision of the Greek Supreme Court.