Iraqi Navy Intercepts Suspected Fuel Smuggling Vessel Near Khor Al-Zubair Terminal

Iraqi naval forces have detained a vessel suspected of engaging in illicit fuel smuggling operations near the KHOR AL-ZUBAIR Oil Terminal, a critical export point in Iraq’s southern Basra region. The interdiction took place within Iraq’s territorial waters in the northern Persian Gulf, marking one of the rare high-profile seizures in recent years in this strategically sensitive zone.

According to statements from Iraq’s Naval Command, the vessel—described as an offshore support vessel (OSV) rather than a conventional product tanker—was boarded after displaying suspicious maneuvering patterns consistent with illicit ship-to-ship transfers. The boarding operation was conducted under the authority of the Iraqi Ministry of Defense, with naval assets deployed from the Umm Qasr base.

Although the vessel’s name and IMO number were not disclosed, initial assessments suggest it was flying theIranian flag, with an Iranian national acting as master.The crew complement included eight Indian nationals and two Iraqi citizens, all of whom have been detained pending further investigation by Iraqi maritime authorities.

The vessel is suspected of loading refined petroleum products in violation of customs and export control regulations, and may have been engaged in unauthorized bunkering or fuel transshipment activities intended to circumvent sanctions or domestic fuel subsidies. Iraqi officials have not yet disclosed the volume or grade of fuel aboard the vessel.

The Khor Al-Zubair terminal, located approximately 35 kilometers southwest of Basra, handles a combination of liquid petroleum products, petrochemicals, and industrial feedstocks. The terminal has seen a rise in throughput in recent months following rehabilitation efforts and expanded pipeline connectivity from upstream refineries. Its proximity to Iran and the contested smuggling corridors in the northern Gulf make it a hotspot for illegal fuel trading activities.

Industry Implications

Analysts note that while large-scale product tankers are rarely used for smuggling due to their AIS traceability and commercial visibility, small-to-medium OSVs and coastal craft have become increasingly common tools for grey-market fuel transport. These vessels often operate under flags of convenience or informal registries, with limited transparency in ownership and manning arrangements.

The seizure underscores growing Iraqi efforts to assert maritime domain awareness (MDA) and secure hydrocarbon logistics channels amid heightened regional tensions and persistent fuel subsidy arbitrage between Iraq, Iran, and Gulf neighbors.

Shipowners and charterers operating in the northern Gulf are advised to review their due diligence protocols, particularly with respect to STS (ship-to-ship) operations and bunkering conducted near Khor Al-Zubair and Umm Qasr anchorages. Enhanced vetting of OSV traffic, especially Iranian-flagged units, may become a regulatory focus in the coming quarter.

Authorities have not yet confirmed whether the vessel will be subject to forfeiture, nor if the operators face criminal prosecution under Iraqi law. However, preliminary indications suggest the case may be escalated to the Federal Oil Ministry and the GeneralCompany for Ports of Iraq (GCPI) for further adjudication.

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