January 2024 Iran Tanker Tracking

The Iran-backed Houthi terrorist group in Yemen has carried out a total of 30 piracy (hijacking), UAV, and anti-ship ballistic missile attacks on ships in the Red Sea and Gulf of Aden since the first attack on November 19, 2023, the hijacking of the GALAXY LEADER (IMO: 9237307).

Even following the December 18, 2023 launch of the U.S.-led international maritime coalition, Operation Prosperity Guardian, the Houthis have continued to attack ships at a broadly similar rate – albeit the targets now include both commercial and military vessels.

In the 31 days between November 18th to December 18th, when Operation Prosperity Guardian commenced, the Houthis launched 13 attacks. In the 31 days between December 19th to January 18th, the Houthis launched the same number of attacks (13).  A further four attacks have occurred during the last two weeks, the latest a UAV strike against the Royal Navy ship HMS Diamond on January 28th.

On January 25, Houthi Supreme Leader Abdulmalik al Houthi claimed the attacks have not significantly harmed maritime commerce. This is false. Several major shipping lines have been forced to suspend Red Sea operations and resorted to routes around the Cape of Good Hope in South Africa, which adds 7-10 days to a typical journey from East Asia to the U.S. Abdulmalik also falsely claimed that the Houthis have only targeted Israel-linked vessels.

While the United States and the UK have responded with some airstrikes targeting warehouses and facilities, a stronger response will be required to either substantively degrade Houthi capabilities and/or restore credible deterrence. Major shipping lines are unlikely to revert to the Suez Canal for the foreseeable future until the risk of hijackings, drone, and missile strikes is minimized, given the Houthis’ ongoing promises to continue their attacks.

While global supply routes have been seriously affected by the Houthi attacks, Iran’s oil trade, especially to its number one importer, China, has continued unabated (in any event, the Houthis’ maritime zone of operations is restricted to the Red Sea and Gulf of Aden, for now, rather than the Persian Gulf and Straits of Hormuz). For January 2024, Iranian exports to China hit 1 million barrels per day. The revenue from these sales is fundamental not only for the regime’s survival but also as a critical source of funds disbursed to its terror proxies, including the Houthi movement in Yemen.

*Figures to be updated over the following weeks

Iran-China Oil Trade Dynamics: A Shifting Landscape

Earlier this month, Reuters reported, “China’s oil trade with Iran has stalled as Tehran withholds shipments and demands higher prices from its top client, tightening cheap supply from the world’s biggest crude importer, refinery and trade sources said.” This move from Iran is not just a simple business negotiation tactic—it signals a strategic recalibration by Iran regarding its oil exports.

 An intriguing aspect of this situation is the role of China’s smaller independent refiners, known as “teapots.” While China’s historically leading oil-importing teapots have not imported Iranian oil this month, lesser-known teapots have stepped in to fill this void, leading to a reshuffling in the rankings.

This raises several questions: Why are lesser-known teapots importing Iranian oil despite the overall reduction in imports?:

1. Pricing Strategy: Smaller teapots might be more flexible or eager in terms of sourcing affordable crude, making them more willing to negotiate with Iran, even at higher prices.
2. Supply Chain Dynamics: The smaller scale of these refineries might allow them to adjust more rapidly to changing supply dynamics, making them more adept at capitalizing on opportunities that arise due to shifts in global trade patterns.
3. Geopolitical Maneuvering: This situation could also reflect a broader geopolitical strategy by China to maintain a diversified oil supply, using lesser-known entities to navigate politically sensitive waters.

A more proactive and detailed approach to addressing the Iran-China oil trade, focusing specifically on the increasing role of the lesser-known Chinese teapot refineries, is needed. We strongly recommend the administration to monitor these refineries and their transactions with Iran. Furthermore, stricter regulations and transparent reporting mechanisms to oversee these interactions could be beneficial. This will provide valuable insights into the evolving landscape of Iran’s oil trade and cracking down on such activity.