The United States recently imposed major sanctions on Iran’s liquefied petroleum gas (LPG) shadow fleet, marking one of its most extensive actions against Iran’s energy exports. The sanctions, announced in October, aim to restrict Tehran’s LPG trade, which heavily depends on a fleet of vessels operating under complex ownership structures to evade detection. While these measures have increased pressure on Iran, their long-term effect on LPG exports remains uncertain.
US Sanctions and Their Immediate Impact
The US Treasury Department targeted 14 LPG carriers, including 11 large vessels primarily operating between Iran and China. This move brought the total number of Iran-linked LPG carriers under sanctions to over 40% by deadweight tonnage (dwt). Despite this, Iran’s LPG loadings in October still exceeded 800,000 tonnes a drop from previous months but still 16% higher compared to the same period last year.
The sanctions are intended to disrupt Iran’s export chain by complicating logistics, insurance, and vessel operations. However, Iran has a long history of navigating restrictions using its “shadow fleet” ships that hide their identities or manipulate tracking systems (AIS spoofing) to disguise origins and destinations. This makes it difficult to fully block its trade activities.
Challenges and Adaptation in Iran’s LPG Trade
Iran’s LPG trade operates differently from its crude oil exports. LPG cargoes usually follow more direct routes, often involving only one ship-to-ship (STS) transfer, making them harder to conceal but more efficient. With new sanctions in place, these supply chains may face delays, higher costs, and logistical complications.
Interestingly, even after being sanctioned, some ships continued to deliver LPG to China, showing that the restrictions have not yet completely halted operations. Meanwhile, data shows that the LPG shadow fleet consists of 117 vessels, many managed by companies in the UAE and India. Some of these ships are insured by Western firms, while others operate without clear insurance records, making enforcement even more complex.
The latest US sanctions reflect Washington’s renewed determination to curb Iran’s energy revenues by targeting its LPG exports. While these actions have created obstacles for Tehran, Iran’s adaptability and widespread use of deceptive trade practices make it difficult to predict the real impact. In the coming months, global observers will watch closely to see whether these sanctions significantly reduce Iran’s LPG shipments or merely push its shadow fleet further into the dark.
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Source: Lloyd’s List
