On 4 January, Iran’s Revolutionary Guards Corps (IRGC) seized a South Korean-flagged oil tanker in the Strait of Hormuz amidst an ongoing dispute over Iranian funds held in South Korean banks. The assets, totaling roughly USD 7 billion, were frozen in September 2019 when the US tightened sanctions on Iranian petrochemical exports, which included ending import waivers to countries like South Korea.
The vessel’s seizure appears to be the latest move by Tehran in recent days to ramp up its pressure on Washington to lift crippling economic sanctions as its financial crises deepen. Notably, as per legislation passed in early December, Tehran also informed the International Atomic Energy Agency (IAEA) this week that it would begin enriching uranium to 20% (up from around 4% currently) and end IAEA inspections of suspected nuclear sites as long as US sanctions remain in place.
Oil tanker seizure linked to US sanctions will drive tensions in the maritime sphere
Iran claimed that the IRGC had seized the vessel due to its violation of maritime environmental protection laws, likely in an attempt to downplay the incident and prevent any escalation with the US and its allies. Nevertheless, South Korea has responded by sending a destroyer with 300 soldiers to the Strait of Hormuz, raising the risk of more aggressive posturing and the potential for miscalculation resulting in an armed escalation.
Seoul will hope to avoid this however, despite its posturing, instead seeking a diplomatic solution to the seizure. South Korea’s position as an US ally will likely have encouraged Tehran’s targeting of the vessel, as will the perception of Korea as a soft target, not known for assertive foreign policy responses. However, being dependent on the US’ security umbrella in relation to North Korea means Seoul has limited options in resolving the issue of the frozen Iranian assets without Washington’s approval.
Iran has relied on the tactic of vessel seizures, sabotage operations and intimidation in key shipping lanes in recent years to respond to tightening US sanctions and tensions with other signatories of the 2015 nuclear deal, like the UK. As such, while the latest seizure risks moderately escalating tensions with the incoming US administration, these incidents are not uncommon. For example, in August last year the IRGC seized a UAE-registered vessel for illegally entering its waters, and has seized several tankers since mid-2019 during anti-oil smuggling operations. Its seizure of a UK-flagged vessel in mid-2019 considerably increased regional tensions, but did not result in armed exchanges…