By Roslan Khasawneh
SINGAPORE, March 28 (Reuters) – It was a quiet day in January, and many oil traders were still on holiday, when two sources in the industry called to alert me to something unusual – a supertanker that had gone off radar for two weeks appeared off the coast of the United Arab Emirates and was pumping out fuel oil to two smaller vessels.
The sources said it appeared that the supertanker was selling Iranian oil in violation of U.S. sanctions. If confirmed, the sale would shine a rare light on how traders and shippers were evading the sanctions.
My first task was to identify and monitor the vessels involved. I called up satellite data offered by Refinitiv, a sister company of Thomson Reuters, that show the movements of ships around the world.
I also reached out to three other institutions that track the passage of ships and confirmed that the supertanker, the Grace 1, had its Automatic Identification System, or transponder, switched off between Nov. 30 and Dec. 14, 2018, meaning its location could not be tracked.
The transponder is an instrument that all large commercial ships are required to keep on, to pinpoint their location. However, it’s difficult to police vessels that switch it off on the high seas.
The satellite data showed the supertanker re-appearing in waters near Iran‘s port of Bandar Assaluyeh. The data also includes the ship’s draught – how deep a vessel sits in water – and it was near maximum at the time, indicating its cargo tanks were full.
The Grace 1 then lined up next to two smaller tankers between Jan. 16 and Jan. 22 in waters offshore Fujairah in the UAE, the data showed. When both left the area, their cargos were full.
Following tankers via satellite images wasn’t enough, however. I contacted the companies managing the Grace 1 and the two smaller vehicles.
Reuters also mobilised journalists in Baghdad and Tripoli in Libya to talk directly to ship managers, port officials and shipping agents about the transactions.
The Grace 1, a Panamanian-flagged tanker, is managed by Singapore-based shipping services firm IShips Management Pte Ltd, according to shipping data. IShips did not respond to several requests for comment via email or phone.
I visited the Singapore office listed on IShips’ website but was told by the current tenant that the company had moved out two years earlier.
The manager of Kriti Island, one of the smaller vessels, e-mailed me a document, the Certificate of Origin, showing the oil was loaded from the port of Basra in Iraq.
The next step was go to Iraq to establish the authenticity of the document.
An official from Iraq’s state oil marketer SOMO told Ahmed Rasheed, a Baghdad-based Reuters correspondent, the document was “faked” and “completely wrong”. The official declined to be identified by name, citing the marketer’s communications policy.
Two other Iraqi oil industry sources with direct knowledge of Basra port and oil industry operations also told Rasheed the document was forged.
The two sources said the document bore the signature of a manager who was not working at Basra port on the stated dates. The document also contained contradictory dates: It indicated a loading period of Dec. 10 and 12, 2018 but a sign-off date for the transaction of 11 months earlier, at Jan. 12, 2018.
Basra port loading schedules reviewed by Reuters did not list the Grace 1 as being in port between Dec. 10-12.
Major oil traders form a small group and soon talk was spreading that Reuters was investigating the Grace 1 transactions.
Reuters received several unsolicited calls, text messages, and even a legal notice by e-mail aimed at preventing the publication of such an article.
After many more checks and clearance by our legal advisers, the article uncovering Iranian fuel oil shipments despite U.S. sanctions was published on March 20, two months after the first chatter of such trades. The story was among the most read on the day by Reuters clients and it was widely circulated by media customers.
Two days later, a U.S. State Department official said Washington was investigating and that it reserved the right to take action against any person helping Iran evade U.S. sanctions on energy shipments.
(Reporting by Roslan Khasawneh; Editing by Henning Gloystein and Raju Gopalakrishnan)