The owner of a suspected Iranian crude cargo is locked in a $35m dispute with Euronav after the US seized the oil following a ship-to-ship transfer to one of the world’s largest tankers.
United Arab Emirates-based Black Swan Petroleum has brought a damages claim in Malaysia over the loss of more than 600,000 barrels of oil that were discharged to Euronav’s floating storage unit, the 441,600-dwt Oceania (built 2003), off Malaysia in March 2023, according to a High Court ruling in London.
Campaign group United Against Nuclear Iran (UANI) raised the alarm about the source of the reputed Iraqi cargo during its discharge from the Vietnamese-owned 105,200-dwt Abyss (built 1998) to the Oceania. The group claimed the Abyss had been spoofing its position and had loaded the cargo at the Iranian port of Bandar Mahshahr.
Euronav’s own investigation backed UANI’s claims, and the US Department of Justice subsequently issued a seizure warrant for the cargo.
The New York-listed Belgian tanker owner felt it had no alternative but to hand over the oil — valued at $25m to $35m by the American authorities — which was transferred to another tanker and taken to the US for sale, court documents show.
Surrendering possession
But the UAE owners of the cargo now want damages for the loss of the oil and obtained an arrest warrant for the Oceania from a Malaysian judge in September on the basis that Euronav’s “surrendering possession of it … had unlawfully converted it”.
The legal dispute centres around the agreement struck by Malaysian company Silk Straits to secure three months of storage on the Oceania at $20,000 per day from Euronav.
Silk Straits in turn rented out the space to Black Swan Petroleum. But Black Swan Petroleum claims it was not part of an agreement in the original deal to settle any dispute at arbitration in London.
Instead, it brought a claim at Malaysia’s High Court before Euronav started its own action in London. The dispute, ongoing for over six months, prompted a London judge to adjourn the case once more on Friday to await a ruling in Malaysia.
The Oceania has since been sold and was delivered to its new owner in January 2024 — the month before US officials announced the seizure of the oil cargo.
Euronav said the sale was part of a fleet optimisation strategy and in response to new environmental regulations.
US prosecutors claimed that the eventual planned sale of the Abyss cargo was to provide funds for the Islamic Revolutionary Guard Corps and other parts of the Iranian regime that have been sanctioned by the US.
They said the Abyss had transported Iranian crude and refined products on at least 19 occasions since 2019. Washington sanctioned the tanker last month in connection with what it said were the activities of Houthi financial facilitator Sa’id al-Jamal.
Black Swan Petroleum and lawyers for Euronav have been approached for comment.
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