Three UAE based companies are buying and shipping oil from Venezuela, a Latin American country facing harsh US sanctions since June last year.
A little-known shipping company based in the United Arab Emirates(UAE) took over the management of some oil tankers which were used to carry the Venezuelan oil in order to bypass the US oil sanctions on the South American country, according to a special report published by Reuters.
In June, the UAE company, Muhit Maritime FZE, changed the vessels’ names and resumed transportation of Venezuelan crude oil during the second half of the year.
The Muhit Maritime FZE, one of the three companies dealing with the Venezuelan oil, has come under fire for its role in bypassing the US oil sanctions, according to the Reuters' examination of internal shipping documents from Venezuela’s state oil company.
Just in six months, it is expected that the company had transported millions of barrels of oil produced by state-run Petroleos de Venezuela SA, or PDVSA, according to the internal documents.
Muhit Maritime, Issa Shipping FZE and Asia Charm Ltd did not respond to letters and emails from Reuters and their ultimate owners are not listed in the UAE’s publicly-available corporate registry.
The report shows how the UAE, one of Washington’s closest allies in the Middle East, has become a hub of dodging the US oil sanctions on Venezuela.
Washington has long been trying to topple Venezuelan President Nicolas Maduro by cutting off the oil-rich nation’s crude exports.
These three companies totally shipped nearly 3.9 percent of total Venezuelan oil and fuel exports in 2020 through December 18, according to Refinitiv Eikon vessel tracking data and Equasis, the shipping database.
That oil was worth around $208.5 million at market prices that contribute to the country's economy, which has long been suffering a deep economic crisis since 2013.
A US State Department spokesman said: “we are closely tracking these kinds of creative efforts by companies to evade sanctions” in response to these UAE-based companies. “Those behind shell companies would not be wise to consider themselves shielded from sanctions.”
The US official did not mention any possible future sanctions but added: “US friends and adversaries alike should know that their companies, front companies, and tankers remain vulnerable to sanctions if they are complicit in activities that facilitate PDVSA’s exports abroad and the Maduro regime’s efforts to evade sanctions.”
A comprehensive investigation into Muhit Maritime, Issa Shipping and Asia Charm has been started by the UAE government.
“The UAE takes its role in protecting the integrity of the global financial system extremely seriously. This means actively administering and enforcing economic and trade sanctions,” the government statement said.
A representative of the Fujairah Free Zone in the UAE, where Issa Shipping and Asia Charm are registered, said he was not aware of the two companies’ involvement in transporting Venezuelan oil. He also added the authorities are not responsible for the activities of these companies.
Besides helping Venezuela in evading the US sanctions, the Emirati companies are also working with Iran for the same purpose.
The US Treasury has sanctioned more than half a dozen UAE-based entities this year, alleging they were involved in purchasing or brokering the sale of Iranian oil and petrochemical products in violation of its sanctions.