Iran Detains Foreign Oil Tanker in Strait of Oman for Fuel Smuggling

The Iranian Islamic Revolutionary Guard Corps (IRGC) navy apprehended a foreign oil tanker in the Strait of Oman, accusing it of smuggling two million liters of fuel. The operation took place near Larak Island, a strategically significant location in the Strait of Hormuz, which is a vital route for approximately 20% of the world’s oil and 30% of liquefied natural gas.

The vessel, along with its 14 crew members, was detained and transported to the port of Bushehr for further investigation. According to Iran’s Tasnim news agency, the tanker was carrying diesel fuel, allegedly sourced from Iranian boats for resale beyond territorial waters. This seizure is part of Iran’s broader efforts to combat oil smuggling in the Persian Gulf, where inexpensive Iranian fuel is frequently trafficked to neighboring nations. The confiscated fuel will be transferred to the National Iranian Oil Refining and Distribution Company. The specific name of the vessel and its country of registration were not disclosed, consistent with Tehran’s usual approach in such cases.

The Strait of Hormuz, linking the Persian Gulf to the Gulf of Oman, continues to be a contentious area. In 2024, Iran seized the St. Nikolas, a tanker registered under the Marshall Islands, accusing it of transporting contraband oil in retaliation for the U.S. seizure of Iranian cargo in 2023. Incidents in this strait have escalated amid the ongoing tensions between Iran and Israel. In June 2025, three tankers caught fire in the Gulf of Oman following a collision, resulting in a 4% spike in oil prices. While the precise cause of these fires remains unverified, analysts attribute them to the increasing regional hostilities.

Iran has consistently stated its readiness to close the Strait of Hormuz if it perceives a threat, a move that could have significant repercussions for the global oil market. Iranian parliament member Esmail Kosari remarked that Tehran “will not hesitate” to take necessary actions.