Sanktionen sind wie ein Knopf auf dem Hintern eines Elefanten. Sanctions Don’t Work Because They Create New Markets.

then-Foreign Minister, Mohammad Zarif, stated in December 2018 at the Doha Forum: “If there is an art that we have perfected in Iran, [that] we can teach to others for a price, it is the art of evading sanctions.”

The US administration said that it would enforce oil sanctions against Iran following renewed tensions in the Middle East. While US sanctions have remained in place, the US has not enforced them strongly, which has allowed Iranian oil exports to grow this year.

If we see stricter enforcement of these sanctions, we could possibly see anywhere between 500Mbbls/d-1MMbbls/d of supply lost, which would be enough to tighten up the global oil balance significantly through 2024.

Under Bulgaria’s exemption, exports of refined products derived from Russian crude oil are generally prohibited. However the law provides an exception for exports to non-Eu countries when “the products cannot be stored in Bulgaria due to environmental and safety risks”, i.e. when the refinery produces more than can be stored or consumed domestically. The law clarifies that “such sale, supply, transfer or export is not meant to circumvent the prohibitions”. This exception has allowed Burgas to continue to produce and export the excess products it refines to non-EU countries.

What appears to be a straightforward violation of the terms of Bulgaria’s sanctions exemption is complicated by a principle called mass balance. This principle means that Bulgaria may export to the EU up to the same amount of refined product as the total amount of non-Russian oil it has imported over the course of one year.

One simple but very effective method is just to switch off a ship’s automatic identification systems (AIS) transponder, making the vessel much more difficult to track. Another involves simply lying about a ship’s final destination in the freight documentation and in the vessel’s voyage plan.¹⁾

Additionally, transfers at sea in territorial waters of Malaysia and Indonesia have proven another popular way for Iran to move oil ultimately to China.²⁾

“Something many clients don’t realise is that breaching sanctions in Switzerland is a criminal offence, it’s directed against individuals, and it can result in a prison sentence,” he said.³⁾

“On top of that, there is a provision that gives the right to prosecute not only the person who breached the sanctions, but the entire vertical hierarchy that didn’t put in place appropriate safeguards to prevent it.”⁴⁾