Uncharted Waters: Iran Seizes South Korean Tanker Amidst Tense Sanction Negotiations

Oil tankers frequently visit the Strait of Hormuz, home to 20% of the world’s oil production (Image from Shutterstock)

In the Persian Gulf, Iranian forces seized a South Korean tanker in the waters off Oman on January 5, plunging the countries’ diplomatic relations into uncharted waters. 

The chemical tanker Hankuk Chemi carrying 7,200 tonnes of ethanol was sailing through Western Asia when armed Iran’s Revolutionary Guards captured the vessel. Following a ten to twenty-minute warning from the Iranian authorities, the ship was boarded, and communication between the ship and its company, the DM Shipping Co., was severed. 

South Korea’s foreign ministry reported the ship had 20 crew members aboard, including nationals of South Korea, Vietnam, Myanmar, and Indonesia. According to a crew member who met with a South Korean diplomat based in Iran, he and the other 19 sailors were not suffering any mistreatment from the authorities. The tanker and crew remain in custody at the port city of Bandar Abbas near the Strait of Hormuz. The United States and South Korean government demanded Iran to release the tanker immediately. 

Though the narrative the Iranian media promulgate is that Hankuk Chemi was seized because it was overly polluting the gulf, the timing of the seizure warrants further consideration. It appears that the Iranians sought to gain leverage over Seoul before the South Korean Vice Foreign Minister and delegation arrived in Iran for negotiations. The discussion’s agenda focused on the possibility that South Korea would release Iran’s 7 billion dollars Korean banks held due to U.S. sanctions. According to Mohammad Javad Zarif, Iran’s Foreign Affairs Minister, Iran wants the frozen funds to lighten the burden of the Covid-19 pandemic. However, a U.S. State Department representative stated, “The regime continues to threaten navigational rights and freedoms in the Persian Gulf as part of a clear attempt to extort the international community into relieving the pressure of sanctions.” 

Hankuk Chemi’s capture is not without precedent, yet the tanker’s seizure poses broader implications for international trade as it represents the culmination of a pattern. For example, in July 2019, Iran captured a British oil tanker, claiming the vessel flouted “international maritime rules.” Two months later, Iran released the tanker after a series of tensions arose between the United States, Saudi Arabia, and Iran following a supposed Iranian attack on a Saudi oil facility. Moreover, located near the Persian Gulf is the Strait of Hormuz. Beyond connecting the Persian Gulf with the Gulf of Oman, a fifth of the world’s oil travels through the narrow strait. Throughout the past 60 years, the Strait of Hormuz has been a point of international conflict after countries such as Iran captured international ships or even closed down the strait from foreign activity. Slowed international shipping in the region would have dangerous economic effects worldwide, potentially causing oil prices to spike. 

Through Iran’s 2015 Nuclear Deal, the U.S. lifted sanctions in return for Iran significantly reducing its nuclear work. When the United States withdrew in 2018, however, the sanctions were reinstated. Since then, Iran has retaliated by breaking the deal’s restrictions. Last week, Iran raised uranium enrichment levels to 20% at one of their key underground nuclear facilities, Fordo. The recent increase brings the country only a technical step away from weapons-grade purity levels of 90%. Although fuel enriched at that level (20%) is not enough to create a bomb, raising levels from the current 20 to 90% purity is a lesser effort, which is sufficient to produce bomb-grade fuel.

Iran denied that they captured the ship for political reasons. Iranian Foreign Ministry spokesman Saeed Khatibzadeh stated, “According to initial reports by local officials, it is purely a technical matter and the ship was taken to shore for pulling the sea.” Despite carrying an abundance of chemicals, the tanker, on the other hand, denies any sort of pollution. 

News outlets connected with Iran’s Revolutionary Guards, however, printed front-page headlines the next day linking the seizure of the ship to the frozen funding negotiations with South Korea. A headline in the newspaper Vatan Emrooz said, “We captured the thieves,” while the Tasnim News Agency called it “A clean response to revenue thieves.” Iran’s deputy foreign minister Abbas Araghchi said South Korean banks have illegally blocked Iran’s currency for nearly two and a half years, citing a fear of U.S. sanctions: “This action [by South Korea], which is only surrender to ransom demand from the U.S., is not acceptable, and naturally, the expansion of relations [between Tehran and Seoul] would be meaningful only when this problem is solved.” 

Other than South Korea, Iran has been able to access resources in other countries despite U.S. sanctions. Furthermore, according to Abdolnaser Memmati, the Governor of the Central Bank of Iran, “A year and a half ago, I had talks with South Korean officials, including the Deputy Prime Minister and Minister of Economy, about this issue, and they promised assistance and cooperation, which unfortunately were not realized.” Feeling frustrated and betrayed, Iran will not be indifferent towards this issue. 

On January 10, a South Korean diplomatic delegation arrived in Iran to negotiate the release of their tanker and crew. A spokesman from the South Korean Foresign Ministry, Choi Young-sam, said “Our goal is an early release of the ship and its crew… the Iranian diplomatic authorities have also made it clear to us that they will cooperate with us for an early resolution of this issue.” The situation will also be discussed later this month during the planned visit to Tehran by the Vice Foreign Minister, Choi Jung-Kun, during which they are expected to address the frozen funds.

By Michael Hlavaty