Oil or petroleum is undoubtedly the most valuable physical commodity of the 20th and 21st centuries. Whether it be your car, bike or the air and water vessels your goods travel in, all are possible because of this very commodity. As a result, it has been a trend of the late 20th and early 21st centuries that countries with vast amounts of oil have been some of the richest countries in the world. That being said, there are countries that, even with a lot of oil, are nowhere near being rich or prosperous. One example of such a country is Iran. Long-standing sanctions from global leaders like the USA have crippled the oil economy of the country, leaving its people like peasants when they can be very rich. 

A History Of Sanctions That Crippled Iran

The number of sanctions that left Iran’s oil useless started from a spree of restrictions and sanctions in the late 70s. Initially, the US and Iran had a good relationship when the US-sponsored Shah was in control of the country. However, in 1979, the people of Iran overthrew the Shah and stormed the US embassy, keeping 52 people hostage for 444 days. As a result, the then-president of the US, Jimmy Carter, froze Iran’s assets worth $12 billion and imposed trade restrictions. For the next few years, the US declared Iran a terrorist state for sponsoring terrorist groups like Hezbollah. Then, the final nail to the coffin came in 1995, when President Clinton issued executive orders banning all US companies from doing any trade with Iran, including oil. Then, in the following years, the Obama administration also imposed several sanctions targeting the banking, energy and financial sectors of Iran as a response to Iran’s increasing involvement in nuclear projects. However, they also signed the JCPOA or Joint Comprehensive Plan of Action, which allowed Iran some breathing room in exchange for less involvement in nuclear projects. 

Things were going well for Iran, but then Trump came in like a wrecking ball and withdrew the US from the JCPOA and imposed harsh economic sanctions, targeting oil exports, banking, and military industries. With Biden’s arrival, Iran saw a ray of hope, which was crushed in devastating fashion when Biden kept all the major sanctions on accounts of the human rights atrocities reported in the country. 

The Greatest Con in the Oil Industry!

So, how did Iran survive all of this? Why didn’t it crumble like a ball made of sand? Well, this was because of what we have dubbed the greatest con in the oil industry. Recently, the US obtained documents that showed just how Iran pulled out of one of the biggest trade con in history. This operation involves government agencies, international middlemen, and a vast fleet of tankers designed to evade detection. Despite heavy restrictions, Iran manages to export over 1.5 million barrels per day, primarily to China, using deceptive tactics and a shadowy global supply chain.

The ‘Shadow Fleet’ and Deceptive Tactics

Iran relies on a fleet of old, unregistered tankers, known as the “shadow fleet,” which operate with their tracking systems turned off. These ships engage in ship-to-ship (STS) transfers in international waters, often near Malaysia, Singapore, or the UAE. The crude oil is transferred between vessels multiple times before reaching its final destination, disguising its Iranian origin. To further obscure the trade, the oil is often mixed with crude from other countries, rebranded, and resold under false documentation.

Many of these tankers operate under flags of convenience, meaning they are registered in countries with weak regulatory oversight, such as Panama, Liberia, or the Marshall Islands. This makes it difficult to trace their true ownership. Some ships even use forged paperwork, fake company names, and shell corporations to disguise transactions.

Key Players in the Smuggling Network

1. Iranian Government and the IRGC – The Islamic Revolutionary Guard Corps (IRGC) plays a central role in the illicit oil trade, using the revenue to fund regional militias and military programs. The National Iranian Oil Company (NIOC) also facilitates deals through intermediaries.

2. Front Companies and Brokers – A network of intermediaries in countries like China, Malaysia, and the UAE helps launder the oil trade. These firms create fake shipping manifests and sell the oil to refineries willing to bypass U.S. sanctions.

3. Chinese Buyers – China is the largest buyer of Iran’s oil, often purchasing it at a discounted rate through state-affiliated companies. Some transactions involve cryptocurrency payments to avoid detection.

4. International Financiers – Money-laundering operations in Turkey, the UAE, and Hong Kong assist in processing payments, often using non-dollar currencies or front bank accounts.

A Con That Saved Iran From starvation

Whether US sanctions were placed in good faith or not is something to discuss here. The main point is that even after such crippling sanctions, Iran still managed to sell its oil in the international market with the help of every move in the book there is. As a result, it was able to save its people from absolute starvation and was able to turn the economy back on track.