U.S. Calls on Panama to Withdraw Registry of Tankers Carrying Iranian Oil

The United States has asked Panama to remove tankers from its registry that are violating sanctions on the trade in Iranian oil. It is the latest in a series of steps the U.S. is taking to increase pressure on Iran and target the oil trade which they contend is also being used to fund the attacks by the Houthi rebels on shipping in the Red Sea region.

The meeting which took place in Panama yesterday is part of an effort to expand cooperation and collaboration to increase the pressure on the Iranian regime, said Abram Paley, Deputy Special Envoy in the U.S.’s Office of the Special Envoy for Iran. He traveled to Panama with representatives from the Office of Foreign Assets Control of the US Department of the Treasury which administers and enforces economic and trade sanctions. Paley said in a statement that the U.S. is working to expand enforcement of the sanctions as part of a larger diplomatic outreach campaign.

Meeting with representatives of the Government of Panama and the Panama Maritime Authority Paley contended in January alone the U.S. identified six Panama-registered tankers that were transporting Iranian oil in violation of the sanctions.

“Iran and actors related to Iran are trying to evade sanctions here in Panama,” Paley told Agence France-Presse. “They’re trying to abuse Panama’s flag registry.”

Panama has long been the largest international ship registry and while it was recently surpassed by Liberia on the measurement of gross tonnage, Panama still has the most vessels in the world under its flag. The Panama Maritime Agency last year reported over 8,500 vessels in its registry.

The administration of the registry has admitted in the past there were lax enforcement efforts, but they have emphasized that they were working to increase efforts to maintain the quality reputation of the registry. Between 2019 and 2023, they reported withdrawing the flag from 136 vessels that were associated with the Iranian state oil company. In June 2023, they said in the past two years as part of the enhanced enforcement and an elimination program the authority had canceled more than 6.5 million gross tons for issues related to Iran, North Korea, or vessels included in the list of international sanctions.

The NGO watchdog group United Against Nuclear Iran (UANI) highlights a rapid growth in the fleet transporting Iranian oil products. Their analysis shows that the fleet jumped from 70 identified vessels in November 2020 to 395 vessels three years later. The group says that 25 percent of the Iranian government’s revenue comes from crude and natural gas exports.

“UANI has serious doubts regarding the seriousness of Panama’s flag authority,” the group alleged last year reporting that 40 percent of the vessels involved in the Iranian trade are registered in Panama. Panama, they contend is by far the largest registry for ships transporting Iranian oil.

The group however also highlights “flag hopping,” with vessels jumping between registries. Panama working with the other major registries has taken steps to identify and prevent flag hopping. This however as with the Russian oil trade has seen the growth of smaller registries such as Gabon.

The U.S. in 2024 has announced several rounds of sanctions targeting both Iran and the Houthi including the use of Iranian oil to fund the militants. This has included listing several tankers registered in Panama.

Panamanian officials highlighted the meeting with the U.S. representatives. They said it was a dialogue on “continuity of bilateral dialogues related to maritime cooperation, reinforcing the positioning of the Panamanian Merchant Ship Registry in the international arena.”