New Delhi, May 1 The US Navy's blockade of Iran has built economic pressure on Tehran that continues even though the ceasefire has led to a temporary pause in fighting, according to a new report.
The blockade has also hit China’s purchases of Iran’s oil, at discounted prices, deals for which were being carried out through a covert financial system and a fleet of ghost tankers.
According to an article in Sky News Australia, Iran’s Islamic Revolutionary Guard Corps (IRGC) has sustained itself through shell companies, rotating ship identities, and shadow banking corridors that kept oil revenue flowing outside the formal financial system.
The article highlights that earlier, the US kept targeting individual aspects of this covert system put in place by China and Iran to circumvent western sanctions. However, this time around, the US is aiming to dismantle the entire network that in the past has managed to survive the limited action.
It points out that earlier, this clandestine ecosystem survived as China built the infrastructure to sustain it. This included a shadow banking network which concealed the origin of Iranian crude oil, rotating ship identities, and layering payments through third-country intermediaries.
China’s “teapot refinery” sector, comprising small coastal refineries, processed most of Iran's oil exports, while carrying out these deals through the US financial system in dollars and providing the IRGC the hard currency which was required to finance missiles, drones, and weapons transfers to regional proxies such as Hezbollah, Hamas and the Houthi rebels.
The article also states that China was also using Iran as “a rehearsal space,” so that it could use these evasion methods on a much wider scale for itself if required to evade US sanctions.
The IRGC operated a rotating fleet of tankers under falsified identities to conceal Iranian crude shipments to Chinese buyers, while Hengli Petrochemical, China's second-largest independent refinery, received more than five million barrels of IRGC-affiliated crude through that same network, the article points out.
“The arrangement served Beijing on both ends, with Chinese refiners purchasing Iranian crude at steep discounts unavailable on open markets, while every successful evasion transaction simultaneously stress-tested the financial infrastructure Xi intended to activate over Taiwan,” the article observes.
However, there has been a big setback to this entire network as in the latest action, the US has sanctioned 35 entities and individuals running Iran's shadow banking system, hitting 19 shadow fleet vessels simultaneously, and putting every company paying IRGC tolls for Strait of Hormuz passage on notice, the article added.
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