By Jonathan Saul
LONDON (Reuters) - Iran is using old tankers, saved from the scrapyard by foreign middlemen, to ship out oil to China in ways that avoid Western sanctions, say officials involved with sanctions who showed Reuters corroborating documents.
The officials, from states involved in imposing sanctions to pressure Iran to curb its nuclear program, said the tankers - worth little more than scrap value - were a new way for Iran to keep its oil exports flowing by exploiting the legal limitations on Western powers' ability to make sanctions stick worldwide.
Officials showed Reuters shipping documents to support their allegation that eight ships, each of which can carry close to a day's worth of Iran's pre-sanctions exports, have loaded Iranian oil at sea. Publicly available tracking and other data are consistent with those documents and allegations.
"The tankers have been used for Iranian crude," one official said. "They are part of Iran's sanctions-busting strategy."
Dimitris Cambis, the Greek businessman who last year bought the ships - eight very large crude carriers, or VLCCs - to carry Middle East crude to Asia, flatly denied doing any business with Tehran or running clandestine shipments of its oil to China.
Cambis said he had not been involved in shipping before but had bought the tankers as part of a new venture he runs from the United Arab Emirates. He denied trading with Iran - though he has contacts there from his previous work in the oil industry.
He denied his vessels have loaded oil from Iran while at anchor in the Gulf. Known as ship-to-ship transfers, or STS, such movements are hard to track as crews can switch off tracking beacons or not update their recorded positions for periods to conceal that one vessel has come alongside another.
Cambis also explained a stop in Iran by one of his tankers - recorded in publicly available tracking data - as having been only for an emergency repair, not to load an oil cargo.
"There is no Iranian vessel that has done any STS with us," Cambis told Reuters in Athens in response to the officials' allegations of taking oil from Iranian tankers owned by Tehran shipping group NITC. "We have nothing to do with NITC."
The officials involved with sanctions dispute his account and showed documents detailing several ship-to-ship loadings. They said all eight of the tankers were involved in Iran trade.
In one instance in early December, according to the shipping documents shown to Reuters by the officials, an NITC tanker named Marigold loaded Iranian crude onto the Leycothea, one of Cambis's eight ships, while both were at anchor off the UAE emirate of Sharjah. Public tracking showed Cambis's tanker made a call about a month later to Zhanjiang oil terminal in China.
Loading at sea lets vessels pick up a cargo without visiting the country of origin of the crude. Officials allege the tankers are also used as offshore storage for Iranian oil which can then be transferred onward to other ships, concealing its origins.
Officials in Iran, which rejects Western allegations it is seeking nuclear weapons, did not respond to requests for comment.
Experts on sanctions law said that by operating outside the European Union, ship-owners had no clear obligation to observe rules barring EU companies from buying Iranian oil, though banks and insurers with EU or U.S. business ties are giving a wide berth to firms they suspect of dealing with Iran, given U.S. and EU efforts to penalize such firms within their own jurisdiction.
"Such ships would be used to delete traces of a trade taking place," a London-based ship broker said.
While Iran has its own substantial tanker fleet, capable of carrying over 72 million barrels, the 2 million barrels that each of the eight tankers can move would be a useful addition to its capacity, analysts said - particularly as their foreign ownership and management could help conceal the Iranian origin of the oil, making it easier to obtain insurance, finance and other ship services that are affected by EU and U.S. sanctions.
Cambis said that between August and November he bought the eight ships: Leycothea, Glaros, Nereyda, Ocean Nymph, Seagull, Zap, Ocean Performer and Ulysses I. The first five are now managed by his firm, Sambouk Shipping, in Sharjah and he is in the process of transferring management of the remaining three.
In other movements indicated by the shipping documents, the Nereyda was also involved in a separate ship-to-ship transfer with NITC's Rainbow in the Gulf in November, while the Glaros took an offshore transfer from the Marigold there in December.
The Nereyda was later recorded arriving at a terminal in China in December. The Glaros appears to have remained in the Gulf since that December transfer, according to tracking data.
Asked about publicly available ship tracking data showing that the Glaros stopped at Iran's Larak Island oil terminal on October 20 last year, Cambis provided what he said was an affidavit by the ship's master describing an emergency repair carried out by Iranian divers when the tanker was headed to Saudi Arabia.
The master, named as I. Bonoutas, could not be reached for comment. Cambis denied loading any oil in Iran. After its stop at Larak, Glaros's next recorded visits, according to ship tracking data, were at Chinese ports between November 24 to December 1.
The eight tankers, built up to 20 years ago, can carry about 16 million barrels of oil among them, shipping databases show.
Iranian crude exports declined to an average of 1.5 million barrels per day (bpd) in 2012, down about 1 million bpd from 2011 levels, data from the International Energy Agency showed.
The eight tankers were bought last year for a total of about $204 million, ship trading sources said - reflecting prices only 3-4 percent above their worth as raw metal. The purchases have been the object of considerable discussion among ship brokers - not least because they would more typically have been broken up.
A ship dealer based in London said, however: "They can carry on trading for as long as people are willing to employ them.
"There's really not much that any authorities can do."
NITC has been blacklisted by the West and the EU has imposed an outright ban on providing ship insurance that would benefit Iran. The exit from Iran of top providers of ship certification, vital for port access, and the removal of Iranian vessels from international registries have added to operational challenges.
While NITC has expanded its fleet in recent months, experts say access to additional foreign tankers would give Tehran more flexibility in maintaining exports.
"The key word for the Iranians is resistance as in the Supreme Leader's declaration of a resistance economy," said Scott Lucas, a specialist on Iran at Birmingham University.
"This is not an economy which is going to produce growth but it is one which is going to try and avoid a domestic collapse."
(Additional reporting by Renee Maltezou in Athens; Editing by Alastair Macdonald)