Maritime tracking data and Panamanian registry records reveal how Iran has assembled a shadow fleet of aging tankers — flying flags of convenience and switching identities at sea — to evade international sanctions and fund its network of regional proxies.
The Shadow Fleet
Somewhere in the waters between the Persian Gulf and the coast of China, dozens of aging oil tankers are engaged in the world’s largest sanctions evasion operation. They fly flags from Panama, Palau, Cameroon, and Tanzania. They switch off their Automatic Identification System transponders to disappear from commercial tracking platforms. They conduct ship-to-ship transfers in open water to obscure the origin of their cargo. And they deliver Iranian crude oil to refineries willing to buy it — generating billions in revenue for a regime under comprehensive international sanctions.
The scale of Iran’s “ghost fleet” has grown significantly through 2023 and 2024. Of the 542 vessels tracked in Iran’s oil trade by monitoring organizations, 17% were flagged by the Panama Maritime Authority — the world’s largest ship registry and a critical enabler of the shadow fleet’s operations.
The Panama Connection
Panama has begun responding to international pressure. By March 2025, the Panama Maritime Authority had cancelled 107 vessel registrations linked to sanctions violations, with 18 additional cancellations underway — a total of 125 vessels stripped of Panamanian registry. The authority also implemented a new policy banning the registration of tankers and bulk carriers over 15 years old — a targeted measure, since 71% of vessels detained for sanctions violations between 2023 and 2025 were over 15 years old.
But Panama’s crackdown is reactive, not preventive. Vessels stripped of Panamanian flags simply re-register under other flags of convenience. OFAC — the Treasury Department’s Office of Foreign Assets Control — has designated specific vessels involved in Iranian oil transport, including the AETHER SAIL, INTAN PREMIER, KHADIGA, SEA WISE, SKYLIGHT, and VOYAGER HAVEN. These chemical tankers, built between 2001 and 2009, fly flags from Palau and Panama and have been identified in Iranian sanctions evasion networks.
The Evasion Playbook
Iran’s sanctions evasion methods are sophisticated and constantly evolving. Vessels engage in flag-switching — changing their registry to a new country when their current flag state faces pressure. Some vessels have temporarily adopted Russian flags, exploiting Moscow’s willingness to shelter sanctions violators. Ship names, IMO numbers, and ownership structures are manipulated through layers of shell companies registered in jurisdictions with minimal transparency requirements.
The State Department’s Iran sanctions framework targets not just Iranian entities but the facilitators — shipping companies, insurance providers, and port operators that enable the trade. But enforcement relies on intelligence about specific vessels, specific voyages, and specific transactions — information that the ghost fleet is specifically designed to obscure.
The Revenue Stream
Iran’s oil exports through the shadow fleet generate billions of dollars annually — revenue that funds the Islamic Revolutionary Guard Corps, Hezbollah, Hamas, the Houthi movement in Yemen, and militia groups across Iraq and Syria. Every barrel of Iranian oil that reaches market through a sanctions-busting tanker represents a direct transfer of resources to organizations designated as terrorist entities by the United States government.
The ghost fleet’s expansion through 2023 and into 2024 occurred during a period of nominal “maximum pressure” sanctions enforcement. The gap between declared policy and observable maritime reality suggests either insufficient enforcement resources, insufficient political will, or both.
The Enforcement Gap
Maritime sanctions enforcement faces structural challenges that favor the evader. Vessels operate in international waters beyond any single nation’s jurisdiction. Flag states profit from registration fees and have limited incentive to police their registries aggressively. Insurance and reinsurance markets are opaque. And the sheer volume of global maritime traffic — tens of thousands of vessels at sea at any given time — makes comprehensive monitoring impossible with current resources.
Iran knows this. Its ghost fleet is designed to exploit every gap in the enforcement architecture. And as long as buyers — primarily in China — are willing to purchase sanctioned oil at a discount, the economic incentive to run the fleet will exceed the economic cost of occasional interdiction.
Eduardo Bacci is an investigative journalist at The Investigative Journal. Data sources include OFAC designation records, Panama Maritime Authority cancellation notices, MarineTraffic AIS data, and State Department sanctions briefings.