Seatrade-Maritime: OFAC targets Iran’s ‘extortion’ insurance scheme in Hormuz

Published by Seatrade-Maritime

The US Treasury’s Office of Foreign Asset Control (OFAC) has imposed sanctions on two Iranian companies it accuses of extorting ships transiting the Strait of Hormuz, and has expanded its list of sanctioned vessels.

OFAC accused Persian Gulf Marine Insurance Company (PGMIC) and HormuzSafe Marine Services Authority of generating revenue by operating an Islamic Revolutionary Guard Corps (IRGC)-backed scheme to provide mandatory insurance to ships transiting the Strait of Hormuz.

“Although this coverage purports to protect vessels from risks such as seizures, these risks are overwhelmingly created by Iran itself,” said OFAC.

The US government has repeatedly voiced its support for freedom of navigation in the Strait of Hormuz, except for a 24-hour period in mid-July when president Trump said the US would be seeking a reimbursement of 20% of the value of any cargo transiting the Strait in order to recover military expenditure by the “Guardian of the Hormuz Strait”.

PGMIC brokers and issues mandatory insurance policies for ships transiting Hormuz with the approval of the US-designated Persian Gulf Strait Authority. OFAC said PGMIC’s actions and those of digital insurance company Hormuz Safe amount to extortion.

Eight ships were added to the designated list, 2007-built product tanker Well Sail (IMO 9321938), and seven crude oil carriers.

2005-built VLCC Lily (IMO 9294331) flies a false Mozambique flag, according to Equasis data.

2005-built, panamax Al Salmi (IMO: 9298296) has an unknown flag since leaving the Panama registry in May. The ship shares a name with Kuwait-flagged VLCC Al Salmi (IMO: 9534793) which was hit by a projectile off Dubai in April and is not subject to OFAC sanctions.

2003-built VLCC Breeze V (IMO: 9259355) claims to fly the Barbados flag since June after leaving the Comoros flag in March 2026.

2006-built VLCC Natsumi (IMO: 9331244) also claims to be Barbados-flagged and has changed its name three times since May 2024.

In January 2026, 2003-built Aframax Yehope (IMO 9243320) re-flagged to Barbados as it changed name and owner.

2002-built VLCC Crystal (IMO: 9223887) shows as Vanuatu-flagged since February 2026, the same registry 2033-built VLCC Nireta (IMO 9237785) joined in April 2026.

The ships are each sanctioned for carrying either hundreds of thousands or millions of barrels of Iranian crude oil to China over various time periods, except for product tanker Well Sail which has allegedly shipped hundreds of thousands of barrels of Iranian petroleum products to the UAE this year.

“With its economy in freefall and inflation in the triple digits, the regime is desperate for cash,” said secretary of the treasury Scott Bessent. “The United States will not allow Iran to hold global commerce hostage or use international shipping to finance the IRGC’s terrorism, aggression, and repression.”

The intensification of OFAC action against Iran is in sharp contrast to the situation one month ago, when OFAC issued a 60-day waiver on US sanctions after the signing of the US-Iran peace MoU. Sanctions were reimposed on 7 July and a bill to extend sanctions on Iran through 2031 passed a US senate vote on 29 July.