Sanctioned Iranian Tanker Caught in STS to be Auctioned in Indonesia

The Indonesian Attorney General’s Office is auctioning an Iran-flagged vessel it detained two and a half years ago when it was caught conducting an illegal ship-to-ship oil transfer to a shadowy second tanker. An Indonesian official said the online auction is to proceed under the authority of the Batan District Court and is an effort to dispose of the tanker and its cargo, which will be sold in a single lot.

The online auction shows a minimum bid of approximately $70.5 million for the vessel and its cargo, which is estimated at nearly 167,000 metric tons (1.24 million barrels) of light crude. A guaranty of $7 million is required to enter the auction, and the buyer will have 30 days to take control and move the tanker from the Batu Ampar Waters anchorage near the Riau Islands.

The vessel named Arman 114 was built in South Korea in 1997 and has been operating under the Iranian flag since 2019. The owner is listed as a company incorporated in Panama. The ship is 300,579 dwt. Its condition is unclear since it was detained in July 2023, and databases do not list an inspection since 2017.

Indonesian officials detected the ship alongside a second tanker in July 2023 and reported that a drone survey showed hoses strung between the two tankers.  They also accused the Arman 114 of causing pollution with leaks from the transfer. The reports said the vessels were spoofing their AIS signal and failed to display a flag, even after they were detected and later challenged.

When the vessels were confronted by the Indonesian authorities, they attempted to run. The second tanker was displaying the name S Tinos, which was later determined to be false. A vessel with that identity had been scrapped in 2018. It, however, alluded to capture. 

The Arman 114 also attempted to run but was apprehended when it entered Malaysian waters. It was returned to Indonesia.

The captain of the vessel was put on trial in July 2024, although he claimed to be only a security guard aboard the vessel. An Egyptian, the master disappeared days before the verdict was to be read. He was convicted in absentia and sentenced to seven years in prison and a $300,000 fine for intentional water pollution. Since he repeatedly failed to appear, the Batam District Court concluded that the master had likely fled.

The court, however, also ordered the vessel and its cargo seized and has now cleared the path for the auction. Indonesia conducted a briefing today, November 24, to prepare for the auction. The sale is scheduled for December 2.

The Arman 114 has been sanctioned by the United States, which also linked the vessel to other illegal STS operations to support Iran’s oil sales. Iranian officials, however, in July 2023, denied ownership of the oil. Without providing details on the ownership of the oil, Iran contended that news reports linking it to the cargo “lacks any credibility.”