Procurement: Ignore The Tanker On The Beach


May 6, 2019: Iran is back at the oil smuggling game and earlier this year there was embarrassing evidence of it. In January a storm hit the Syrian coast and an Indian tanker (Tour 2) that had just delivered Iranian oil to Syria went to sea despite, or perhaps because of, the bad weather. As the ship was leaving the storm drove the tanker ashore. Tugs did not arrive until April to pull the tanker off the beach near the Syrian port of Latakia. It soon became clear what had happened here. During late December 2018, Tour 2 loaded its oil cargo in an Iranian port and after it exited the Suez Canal it turned off its AIS (Automated Identification System), which allows ship owners and their customers to track the progress of large ships. With the Indian shipping company exposed as illegally smuggling oil to Syria, the ensuing  greater scrutiny of ships making deliveries to Syria there meant there have been no more illegal oil tanker visits to Syria this year and there is a very visible oil shortage in most of the country. Iran has resorted to smuggling oil in via truck from Iran to Syria but this is not sufficient to make up for the deliveries via seagoing tankers.

All this is happening because once more Iranian oil exports are hobbled by sanctions and Iran is reviving its usual array of deceptions to try and hide illegal exports to customers willing to risk discovery and punishment when the Iranian deceptions fail. The last time (2012-2015) Iran got hit by an oil export ban shipments dropped from 2.6 million barrels per day to a million barrels per day. As the sanctions were once more imposed in late 2018 Iranian exports quickly fell from 2.8 million barrels per day to 1.8 million barrels. By April 2019 legal shipments had declined to under a million barrels per day. The decline delay was caused by exemptions given to eight export customers who needed time to shift to another supplier. Some of the exemptions are permanent which is why the exports never hit zero. There are plenty of other suppliers because there has been a world oil glut since 2010 because of fracking in North America (and now elsewhere). The OPEC oil cartel has restricted production to try and drive the oil price up but that only worked for a while and only partially. Even before Iranian oil sanctions were revived the oil price was declining again. So there are plenty of oil producers willing and able to replace Iranian exports. Illegal Iranian oil exports are sold at a lower price because of the risk (financial costs if caught) and that also contributes to keeping oil prices low. But if scrutiny is too intense the smugglers find they cannot reach many customers.

Iran is not only reviving its efforts to hide ship movements but expanding them. One reason the oil sanctions returned was that after most sanctions were lifted in 2015 Iran continued to smuggle weapons by sea, using the same deceptions it employed to try and get around the oil export ban. The difference was that most of the ships Iran used for the arms smuggling were small enough (under 300 tons) that they were not legally required to carry an electronic beacon. But some larger Iranian weapons smuggling ships illegally turned off their beacon and, as the saying goes, “ran dark.” It was this continued smuggling and other unfriendly activity that brought back the oil embargo.

The primary technical deception these days is having ships carrying contraband turn off their AIS transponder. AIS was originally developed to make it easier to track ships at sea and was rapidly adopted by most large commercial vessels in the 1990s. AIS is essentially an automatic radio beacon (transponder) that, when it receives a signal from a nearby AIS equipped ship, responds with the ship's identity, course, and speed. This is meant to enable AIS ships to avoid collisions with each other. The original AIS only had a range of 20-35 kilometers but by 2006 space satellites were developed that could track AIS transmissions worldwide. Commercial ships have become very dependent on AIS, which has greatly reduced collisions (and crew anxiety) at sea. After 2000 international agreements mandated that ships larger than 300 tons, and all passenger ships, carry and use AIS at all times.

While this made it practical to track all high seas commercial traffic, it was also exploited by smugglers and pirates. Some ships traveled (in violation of international law) with its AIS and other trackers turned off. Usually, only criminals turned these devices off, and this was often discovered when navies spotted one of these silent (AIS not broadcasting) ships at sea. It didn’t take long for some intelligence agencies (those with ocean surveillance space satellites and lots of ships and subs at sea) to exploit the “silent AIS” ploy to create better ways to track smugglers by noting when some ships turn off their trackers and then turn them on again as they are about to enter a port (or some other area where AIS use is mandatory). Some nations, like Iran and North Korea, have tankers and cargo ships that are often found “running dark.” Naturally, intelligence agencies developed methods to take advantage of this and a growing number of smugglers, usually North Korean, are detected and tracked because of AIS manipulation. Iran had an easier time concealing arms smuggling because they could use smaller ships. Actually, for getting arms to Shia rebels in Yemen Iran used a lot of small ships that are not required to use AIS. These could be, and were, tracked by satellite but it was more difficult. Oil smuggling is another matter as large ships (tankers) are used and they are easier to spot from orbital space (or by recon aircraft and UAVs).

AIS monitoring has been combined with analyzing the thousands of satellite photos available each day from commercial satellites. Using software that can scan these digital photos and match ship position data with current AIS data it easier to identify who is misbehaving and go after them. This has been bad news for Iranian oil smuggling efforts and so far the Iranians have not come up with effective countermeasures.

Before AIS came along most large ships carried (and still carry) INMARSAT, which enables shipping companies to keep track of their vessels, no matter where they are on the planet. INMARSAT became available in the 1980s and uses a system of satellites which transmit AIS-like signals to anywhere on the oceans. It only costs a few cents to send an INMARSAT signal to one of your ships, and a few cents more to receive a reply. The trackers and satellite-based navigation systems in general soon proved invaluable by preventing collisions or running into reefs, rocks, or (in bad weather) coastline.

The smugglers soon responded to intel agency tracking of AIS activity with new tricks. Back in 2012, Iran was caught hacking AIS signals. Iran was sending false AIS signals to assist its smuggling operations. After 2012 security researchers found even more ways to hack AIS and is calling for changes in the AIS software to make more difficult to spoof. Iran is expected to try this again, despite the increased security measures in the AIS software.

Iran has been working for some time to come up with ways to confuse the international ship tracking system, mainly to support their arms smuggling activities. These “maritime security technologies” were developed as a safety feature and have proved valuable in other ways as well by providing the positions of ships caught in storms or taken by pirates. All ships now use GPS coordinates to record location and constantly report that back to the home office. Iran exploited this by having two of its ships trade INMARSAT IDs while they are near each other, leaving the U.S., or anyone else checking INMARSAT data, unable to track ships that have been switched. Well, for a while at least. Once the intel people caught onto this scam the developed ways to counter it. This is very much a matter of move and counter move when it comes to exploiting or creating AIS vulnerabilities.

Because these tracking systems were, after 2000, required by law (international agreements) for all seagoing vessels, this new tech was particularly useful in counter-terror operations. Coast Guards the world over have also found the systems a big help. But apparently pirates in some areas have gained access to the systems (via bribes or theft) and a large number of pirate attacks appear to have been helped by technology meant to safeguard ships at sea. But overall the tracking systems have done far more good than bad. By 2012 as counter-piracy operations improved and better security inside the AIS operation made it much more difficult to be a pirate via stolen AIS data.

Iranian abuse of the AIS system was not appreciated by the shipping companies and ship crews. The Iranians have been found moving tankers around the Persian Gulf with AIS turned off. The Iranians do this in other parts of the world where there is a lot of ship traffic. This puts ships of many nations at risk and despite Iranian denials, there are enough ships reporting encounters with Iranian ships “running dark” to confirm what Iran is doing. All this outlaw activity turned more and more former allies, or neutrals, against Iran.


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